Super Micro Computer (SMCI) Shares Tumble After Nasdaq Listing Concerns Resurface
📉 SMCI Shares Drop Sharply
Shares of Super Micro Computer (SMCI) experienced a significant decline of 6.26% during afternoon trading on Tuesday, marking a reversal of a five-day rally that had fueled a 60% gain.
Nasdaq Compliance Woes
The stock's slide comes amid concerns about compliance with Nasdaq requirements, as the company faces the risk of delisting after a tumultuous year. SMCI is expected to provide an update on its efforts to address these concerns in a scheduled business announcement on February 11th.
Analyst Outlook
Despite the recent decline, analysts remain cautious on SMCI, with six out of 11 tracked by Yahoo Finance assigning a "Hold" rating to the stock. Their consensus price target of $40.79 over the next 12 months is only marginally higher than Tuesday's pre-market price of $40.37.
Hindenburg Research Report
Super Micro's current challenges stem from a scathing report published by short-selling firm Hindenburg Research in August 2022. The report alleged accounting violations, export control breaches, and questionable relationships with executives and suppliers.
Recent Developments
Following Hindenburg's report, the US Department of Justice initiated a probe into SMCI's accounting practices, and the company's accountant resigned. The release of quarterly earnings also fell short of expectations. Additionally, Nasdaq issued a delisting notice after the delay of SEC filings.
Remediation Efforts
In response to these issues, SMCI has appointed a new accountant and conducted an independent review that found no evidence of misconduct. The company is aiming to submit its delayed filings by the extended deadline of February 25th.