Shares of Super Micro Computer (NASDAQ: SMCI), the once high-flying artificial intelligence (AI) server stock, were back on the move again today. After plunging over a period of several weeks over concerns that began with a short-seller attack and a delay in its 10-K filing, the stock has rebounded sharply since Nov. 15 as the company hired a new auditor and submitted a plan to stay in compliance with the Nasdaq stock exchange.
The stock jumped 15.9% today, meaning it’s now doubled since Nov. 15.
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There was no company-specific news out on the stock today, but shares continued their march higher as investors seemed to believe the risk in the stock was significantly reduced since it filed to stay in compliance and hired a new auditor.
Additionally, short-term momentum may be continuing to lift the stock as traders don’t want to miss out on the rebound.
The company still faces a number of hurdles in order to return to full health as it still hasn’t filed its 10-K or given an expectation of when it will be ready. Its 10-Q for its fiscal first quarter is also late, showing its accounting problems are compiling as it tries to straighten out the discrepancies that led to the delay in the filings and the resignation of its former auditor, Ernst & Young.
The rebound earlier last week, when the company said it had received an extension to submit its filing with the Nasdaq and announced that it had hired a new auditor, made sense, but the continued surge in the stock seems purely momentum.
There’s still little clarity around when the company will make its outstanding filings, and its special committee has not made its report on remedial measures to fix its financial reporting, which the company expected to be completed by Nov. 15.
At this point, the stock still seems very risky. It’s not suitable for long-term ownership until it resolves the outstanding accounting issues.
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