According to the rules of the NASDAQ exchange, the former AI powerhouse in the US stock market, Supermicro Computer, must submit an audited 10-K annual report or a compliance plan to the exchange before November 18th. Otherwise, it may be delisted from NASDAQ and face early repayment of $1.725 billion in bonds.
According to data, Supermicro Computer rose by 272.43% from January 19th to March 7th, becoming a popular AI bull stock in the market, and was included in the S&P 500 index on March 18th. However, since then, its stock price has been continuously declining, with a cumulative drop of over 80% since March 18th.
Supermicro computers face a critical point of delisting
The former AI bull stocks, after being included in the S&P 500 index for 8 months, are about to face the dilemma of being delisted from the exchange.
According to the rules of the NASDAQ exchange, Supermicro Computer must submit an audited 10-K annual report or a compliance plan to the exchange before November 18th. The theoretical deadline is the 16th, but according to exchange rules, if the last day is a weekend, it will be postponed until the end of the next trading day.
In the past few months, Supermicro Computer has encountered a series of negative events such as institutional short selling, delayed annual report submission, investigation by the US Department of Justice, and resignation of the company's auditing agency.
At the end of August, the well-known short selling institution Hindenburg released a short selling report on Supermicro Computer, pointing out that the company had "obvious accounting issues, undisclosed related party transactions, sanctions and export control failures, and customer problems," which raised concerns about the company's financial statements. One day later, the company announced that it would postpone the submission of its annual 10-K report, but insisted that there would be no significant changes for the 2024 fiscal year.
Less than a month later, the US Department of Justice quickly intervened in the investigation. It is reported that the US Department of Justice is mainly investigating short selling reports and former employee disclosures, with a focus on whether Supermicro Computer is suspected of financial fraud and other violations.
On October 30th, Supermicro Computer announced that Ernst&Young, who was responsible for the company's audit work, had resigned. Ernst&Young explained the reason for resignation, stating that they have recently obtained some information that makes them unable to trust the statements of the company's management and audit committee, and are unwilling to have any connection with the financial statements prepared by the management. Supermicro Computer also revealed that the review committee established by the board of directors has completed the investigation into Ernst&Young's concerns, and although there are other ongoing work, it is expected that the review will be completed soon.
Analysts say that currently, if AMD can submit its compliance plan on the 18th and obtain approval from the NASDAQ exchange, the deadline for the company to submit its audited financial report for the previous fiscal year will be relaxed to February next year. If Supermicro Computer is delisted from NASDAQ, in addition to the high probability of being kicked out of the S&P 500 index, it will also face early repayment of $1.725 billion in bonds.
It is worth mentioning that AMD has invited Nvidia CEO Huang Renxun to participate in its COMPUTEX conference activities for two consecutive years. And Nvidia's endorsement has also helped Supermicro Computer's performance and stock price soar in the past year and a half, making it one of the core stocks of AI concept in the investment market.
According to Wind data, Supermicro Computer rose a total of 272.43% from January 19th to March 7th, becoming a popular AI bull stock in the market, and was included in the S&P 500 index on March 18th. However, since then, its stock price has been continuously declining, with a cumulative drop of over 80% since March 18th.
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