The Super Micro Computer (SMCI) is also known as a demon.
On December 2nd Eastern Time, Supermicro Computer announced that it will replace its Chief Financial Officer David Weigand, and Kenneth Cheung, who previously served as Vice President of Finance, will become the new Chief Accounting Officer. It will also recruit new CFO, Chief Compliance Officer (CCO), and General Counsel.
Parallel to the news of the replacement of financial executives, Supermicro Computer claimed that after an external review by the company's board of directors special committee and external lawyers, no inappropriate behavior was found; The resignation of Ernst&Young and the conclusions mentioned in the resignation letter have not been reviewed and supported. This external review was jointly conducted by a special committee of the board of directors and a team of over 50 lawyers from law firm Cooley LLP and accounting firm Secretariat Advisors.
This statement supports the preliminary findings of the special committee announced by the company on November 5th, which stated that there is no evidence of fraud or misconduct by the management or board of directors. The special committee is led by lawyer Susie Jordano, who joined the board as an external director after being accused of financial fraud by Supermicro in August this year.
Claiming no misconduct but replacing the Chief Financial Officer and Chief Accounting Officer, this seemingly difficult to justify "left-right strategy" has raised doubts among some investors, but has caused a high splash in the capital market. Supermicro Computer closed the day up 28.68%. After the market closed, it rose nearly 4% again.
This is a typical 'monster stock'. Hindenburg Research, a short selling institution, released a short selling report in August. The US Department of Justice intervened in the investigation, and Ernst&Young's auditor resigned in October, causing several sharp drops in the stock price of Supermicro. Renowned rating agency Rosenblatt has suspended its rating of the company. Since the low of $17.25 on November 15th, it has rebounded by about 150%, but there is still a considerable distance compared to the high of $122 in March this year.
Supermicro Computer has hired BDO US as its new auditor. Before Lixin issued a solid audit report, competitors in the AI server field where Supermicro Computer operates were rapidly eroding its market share.
For example, Dell XE9680 (air-cooled series) and XE9680L (liquid cooled series) are competing with AMD's SYS-420GP-TNR servers. Dell's servers can accommodate up to 72 GPUs per rack, making them currently the servers with the highest GPU density in this field; The Supermicro computer server supports up to 10 GPUs per chassis, but is characterized by flexibility, customizability, and strong scalability, making it very popular among customers. In addition, companies such as Huihe Technology and Jianan Technology have also secured a batch of orders from small and medium-sized enterprises from Supermicro Computer.
Dell Technologies (DELL.US) recently released its third quarter financial report. Due to lower than expected PC revenue and guidance, its stock price fell more than 12% on November 27th, but its artificial intelligence servers showed strong growth momentum. The server revenue for the quarter increased by 58%, with a shipment volume of $2.9 billion and a backlog of orders in hand of $4.5 billion. A considerable portion of it is diverted from supercomputers.
In order to maintain appropriate "separation" from the suspected financial fraud of AMD, Nvidia has transferred some of its orders to other suppliers in the past few months, including Dell Technologies, HPE, and others.
At the end of November, Dell announced that the world's first batch of Nvidia GB200 series chips had been shipped. This means that the Blackwell series GPU chips, hailed as the new AI engine, have been delivered earlier than the previously estimated delivery date of early December. At the previous earnings briefing, the CEO of AMD acknowledged that they were unable to obtain timely supply of Nvidia chips, including Blackwell.
The financial uncertainty hovering over the company may continue to exacerbate the business risks of AMD.