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Supermicro shares took a major hit Wednesday after the company didn’t say precisely when it would file its 2024 annual report following EY’s resignation as auditor.
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JPMorgan analysts cut their price target by over 50% following the company’s business update and earnings call.
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Super Micro has been given until Nov. 16 to file the report and return to compliance with Nasdaq rules.
Super Micro Computer (SMCI) shares fell 20% Wednesday after the company inflamed concerns it could be delisted after it didn’t fully clarify when it would file its delayed annual report for 2024, a necessity for the company to comply with Nasdaq rules.
Analysts at JPMorgan downgraded the company to “underweight” from “neutral,” cutting their price target to $23 from $50, citing “several risk factors that introduce uncertainty.”
Supermicro previously disclosed that it received a warning letter from the Nasdaq on Sept. 17 that it was not in compliance with the exchange’s rules, which require “timely filing” of reports. The company has been given until Nov. 16 to file or submit a plan. On the company’s Tuesday earnings call, CFO David Weigand said the company plans to file for an extension.
But Supermicro did not directly address questions on its Tuesday earnings call about when the company would file its 2024 report or hire a new auditor. Accounting firm EY resigned as the company’s auditor last week.
“We are actively in the process of engaging a new auditor,” CEO Charles Liang said on the call, a transcript of which was provided by AlphaSense. “We are working with urgency to become current again with our financial report.”
Supermicro said a special committee formed by its board of directors found no evidence of fraud or misconduct. Still, JPMorgan analysts wrote, the “actions of the prior auditor and the special committee are at odds to each other, further increasing confusion.”
Shares of Supermicro are down about 20% this year but, at recent prices around $23, also well off 2024 highs above $120.
