Supermicro Computer’s stock price plummeted 22% after a short report alleged accounting problems, and the company delayed filing its annual and quarterly reports. However, the company has since hired a new auditor, and a special committee found no evidence of fraud.
Despite this setback, Supermicro is trading at a bargain level of 14 times forward earnings estimates, which could make it a potential recovery story in 2025 if the company meets its financial reporting targets and satisfies investors. The recent decline in investor confidence was triggered by a short report that alleged “glaring accounting red flags” but Supermicro denied the claims.
The company’s struggles started with a strong beginning to the year, reporting its first $3 billion quarter and gaining entry into the S&P 500. However, after a Hindenburg Research short report, the shares began to decline, and the company delayed filing its reports, leading to the loss of its auditor.
A special committee formed by the Supermicro board reviewed points brought up by former auditor Ernst & Young and found no evidence of fraud. The committee recommended the appointment of a new chief financial officer and added executive-level positions to keep everything on track. Supermicro has also sent a compliance plan to the Nasdaq and aims to file reports according to the exchange’s timetable.
While it is too early to say if Supermicro is completely out of the woods, its recent actions show promise. The company’s shares are trading at a bargain level, and if it meets its financial reporting targets, it could become the biggest recovery story of 2025. However, investors should exercise caution before buying the stock, as there is still uncertainty surrounding the company’s financial statements.
Source: https://finance.yahoo.com/news/super-micro-computer-sank-amid-101500225.html