SMCI stock tanks another 25% as Super Micro Computer delays 10-K filing

Super Micro Computer Inc (NASDAQ: SMCI) tanked as much as 25% on Wednesday after the AI company said it needs more time to file its annual report.

The management needs extra time to “complete its assessment of the design and operating effectiveness of its internal controls over financial reporting,” the Nasdaq-listed firm said in a statement today.

The announcement arrived only a day after Hindenburg accused SMCI of several wrongdoings, including accounting manipulation.

The SMCI stock is now down more than 65% versus its year-to-date high in mid-March.

SMCI has had accounting-related issues in the past

SMCI plans on filing Form 12b-25 with the US Securities & Exchange Commission for a nontimely NT annual report on August 30^th.

Super Micro Computer must file its annual report within 60 days after the end of its financial year as it’s a large accelerated filer. The NT 10-K will win it a 15-day extension from the US regulator.

Note that accounting-related issues are not unheard of at Supermicro. The computer products company settled a financial accounting investigation for $17.5 million in 2020.

SMCI stock has been under pressure after coming in significantly shy of profit estimates for its fourth fiscal quarter on August 6^th.

The announcement of a 10-for-1 forward split has so far failed to put a floor under its share price as well.

Hindenburg discloses a short position in Supermicro stock

Hindenburg Research revealed a sizable short position in SMCI this week following a three-month investigation that uncovered “glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failure, and customer issues.”

Supermicro has rehired almost all of the senior executives who were ousted as part of its aforementioned settlement with the SEC in August 2020, the activist short-seller learned from a former salesperson.  

The investment research firm went on to call Super Micro Computer a serial recidivist in its report this week. Despite recent developments, Wall Street continues to rate SMCI shares as “overweight”. Analysts see an upside in them to $773 on average which signals potential for a massive 90% gain from here.