Super Micro Computer (SMCI) Avoids Delisting, Stocks Surge in Premarket

Super Micro Computer (SMCI) stock witnessed a surge of 5% in premarket trading on Wednesday, driven by the announcement that the company intends to submit delayed filings to the SEC by the Nasdaq's February 25th deadline, thereby preventing delisting. Despite missing Wall Street's estimates in preliminary second-quarter earnings, SMCI shares plunged by 19% on Tuesday after the results were released.

SEC Filings Deadline

SMCI, a competitor of Dell (DELL) specializing in computer servers utilizing Nvidia's (NVDA) Blackwell AI chips, stated that it "continues diligently working towards filing" its delayed annual and quarterly reports to the SEC. The company expressed confidence in meeting the February 25th deadline.

Super Micro previously postponed filing these reports following a critical report by short-selling firm Hindenburg Research last year, questioning the server maker's accounting practices.

Earnings Report and Revenue Guidance

In the preliminary second-quarter earnings reported on Tuesday, Super Micro missed analysts' expectations. The company anticipates revenue between $5.6 billion and $5.7 billion for the quarter ending December 31st, below the $5.95 billion consensus estimate.

Super Micro revised its revenue guidance for fiscal year 2025 to $23.5 billion to $25 billion, lower than the previous range of $26 billion to $30 billion.

Ongoing Controversies and Legal Matters

Super Micro's business update follows a tumultuous year marked by controversies arising from the Hindenburg report. The US Department of Justice has reportedly launched an investigation into Super Micro's accounting practices. The company's delayed SEC filings and accountant's resignation had raised concerns about potential delisting from Nasdaq.

However, Nasdaq recently granted Super Micro an extension until February 25th. The company has hired a new accountant, and its independent review has found no evidence of misconduct.

Stock Performance and Litigation

Super Micro's stock had been on an upswing leading up to its business update on February 11th, but reversed course on Tuesday. Shares dropped more than 9% by the end of the trading day, ending a week-long rally that had seen gains of nearly 60%.

In its update, Super Micro confirmed receiving subpoenas from the Department of Justice and SEC regarding allegations made in a short seller report published in August 2024. The company stated that it is cooperating with these document requests.

Super Micro also faces "several securities litigation complaints and derivative suits" but maintains that they are "without merit."