TLDR
- Super Micro Computer (SMCI) filed delayed regulatory reports just in time to meet Nasdaq’s deadline and avoid delisting
- The company’s stock jumped over 25% in premarket trading on Wednesday following the announcement
- SMCI had been facing delisting threats after a Hindenburg Research report accused it of accounting manipulations
- Super Micro has denied the accusations and completed an independent review that found no evidence of misconduct
- Despite recent challenges, the company’s business has been growing, with sales more than doubling to $14.99 billion in fiscal 2024
Super Micro Computer (SMCI) shares surged over 25% in premarket trading on Wednesday after the company narrowly avoided being delisted from the Nasdaq stock exchange by submitting its delayed regulatory filings just before the deadline.
The server maker filed its updated quarterly reports for the fiscal year ended June 30, 2024, as well as quarters ended September 30, 2024, and December 31, 2024, after market close on Tuesday. This submission allowed the company to meet Nasdaq’s extended deadline of February 25, 2025.
“The Company has received correspondence from the Nasdaq staff that the Company has regained compliance with the filing requirements, and the matter is now closed,” SMCI stated in a release. CEO and founder Charles Liang called the filing an “important milestone” and said the company can now focus its full attention on its core business.
The filing crisis began last August when short seller Hindenburg Research published a report accusing Super Micro of accounting manipulations. These allegations triggered a series of problems for the company, including an investigation from the Department of Justice, the resignation of its accountant Ernst & Young, and the delay of required SEC filings.
Following the Hindenburg report, Super Micro’s stock took a significant hit. The company missed its first Nasdaq deadline to submit SEC filings in late 2024 but was granted an extension through February 25, 2025, which it has now met.
Super Micro has consistently denied Hindenburg’s accusations of accounting violations. The company hired a new accountant, BDO, and announced in December that an independent review of its business found no evidence of misconduct. BDO has now verified that the financial statements accurately reflect the company’s financial status as of June 30, 2024, and comply with U.S. accounting standards.
However, Super Micro did disclose significant weaknesses in its internal controls over financial reporting and is implementing measures to address these issues. This admission comes as part of the company’s effort to improve its financial reporting processes.
The stock’s jump on Wednesday marked a reversal from Tuesday’s regular trading hours, when shares fell 11.8% ahead of the filing announcement. This recent volatility follows a five-day run of losses for Super Micro shares, which had declined more than 18% over those sessions.
That decline had partially reversed gains from the stock’s weeks-long rally in February, during which shares fully recovered their losses from the fallout linked to the Hindenburg report. As a top performer in the S&P 500 last week, Super Micro stock rose more than 16% on February 19 to just over $60, its highest closing price since August 23, just days before Hindenburg released its report.
Despite recent challenges, Super Micro’s business has been growing rapidly. According to the updated financials, the company’s sales more than doubled to $14.99 billion in fiscal 2024. This growth has been driven by surging demand for Nvidia’s GPUs, which Super Micro incorporates into its server products for data centers.
The company also recently announced ambitious financial targets. During its earnings call last week, SMCI revealed a revenue goal of $40 billion for fiscal 2026, signaling confidence in its future growth prospects despite the regulatory challenges.
Goldman Sachs boosts price target
On Monday, Goldman Sachs boosted its price target on Super Micro stock to $36 from $32 while maintaining a ‘neutral’ rating on the shares. This adjustment reflects cautious optimism about the company’s prospects now that it has resolved its immediate regulatory challenges.
Shares closed at $45.54 on Tuesday afternoon, far below Super Micro’s high above $120 last March before the company was added to the S&P 500. Following the filing announcement and Wednesday’s premarket rally, the stock was trading around $55.10, representing a gain of about 21% from Tuesday’s close.
Super Micro Computer makes server products using Nvidia’s AI chips for data centers, positioning it to benefit from the ongoing expansion of artificial intelligence infrastructure. The resolution of its regulatory issues may allow investors to refocus on the company’s business fundamentals and growth potential in this rapidly expanding market.
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