Super Micro Computer Stock Plunges Despite Five-Day Rally
Super Micro Computer (SMCI) shares plummeted over 5% in early trading Tuesday, erasing gains from a five-day rally that saw a nearly 60% surge.
The decline comes as the company faces an upcoming business update and concerns about Nasdaq compliance. SMCI is scheduled to report earnings after the bell on Feb. 11, with investors seeking clarity on its efforts to avoid delisting.
Despite the recent rally, SMCI shares remain significantly below their all-time high of around $123 last March. The stock's performance has faltered after a strong 2022 and 2023, as the company faced challenges meeting expectations and dealing with allegations from short-selling firm Hindenburg Research.
Hindenburg took a short position on SMCI last August, alleging accounting violations, export control breaches, and dubious relationships with executives and suppliers. These allegations led to a U.S. Department of Justice probe and the resignation of the company's accountant.
Adding to SMCI's woes, the company faced Nasdaq delisting due to delays in SEC filings. However, Hindenburg closed in mid-January, and SMCI was granted an extension by Nasdaq to submit its late filings by Feb. 25. The company has hired a new accountant and claims an independent review found no evidence of misconduct.
Currently, six out of 11 analysts tracked by Yahoo Finance have a Hold rating on SMCI stock. Analysts project a target price of $40.79 over the next 12 months, slightly above its pre-opening price of $40.37 on Tuesday.