Super Micro Computer (NASDAQ: SMCI) stock is surging in Monday’s trading. The tech company’s share price was up 24.9% as of 11:45 a.m. ET.
Supermicro stock is making big gains today following the company’s announcement that an independent special committee had found no evidence of fraud or misconduct by the tech specialist’s management team, board of directors, and audit committee. The company also announced that it was moving forward with a series of recommendations presented by the special committee.
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In August, short-seller Hindenburg Research published a bearish report on Super Micro Computer that alleged repeated accounting infractions and points of structural weakness within the business. The following day, Supermicro announced that it would be delaying the filing of its annual 10-K report with the Securities and Exchange Commission (SEC) and taking steps to review and ensure the quality of its internal reporting practices.
In October, Ernst & Young announced that it was stepping down as the company’s auditor due to concerns about the reliability of statements made by management and whether the company’s auditing committee was actually acting independently from the company. The news prompted huge sell-offs for the stock and compounded concerns that Supermicro’s shares could be delisted from the Nasdaq exchange. The stock is now seeing some rebound momentum as there appears to be some significant progress on resolving key issues.
Last month, Supermicro announced that BDO had signed on as its new accounting firm and that it had submitted reporting plans to the Nasdaq to stave of delisting. Today’s press release about the special committee hired by the company’s board of directors is powering another round of big gains for the stock. Check out this key quote from the recent announcement: “The special committee’s key findings are summarized as follows: Management and Audit Committee integrity: The evidence reviewed by the special committee did not raise any substantial concerns about the integrity of Supermicro’s senior management or Audit Committee, or their commitment to ensuring that the company’s financial statements are materially accurate.”
While the special committee’s findings shouldn’t be taken as a definitive sign that Supermicro has emerged from its recent controversies, investors understandably see the report as a bullish development. The stock is now up roughly 59.5% over the last month.
