Super Micro Computer (SMCI) stock fell more than 9% Wednesday, extending the prior day’s decline despite an apparent attempt from its CEO to dispel fears of the stock’s potential delisting by the Nasdaq.
At the Reuters Next conference Tuesday, CEO Charles Liang said he is confident Super Micro will not be delisted and that the company will meet its new deadline by the Nasdaq to submit delayed filings to the US Securities and Exchange Commission.
“Super Micro is dedicated to transparency and compliance with its regulators,” Liang reportedly said during the Tuesday fireside chat.
Shares had started the week under pressure after JPMorgan analyst Samik Chatterjee on Monday maintained an Underweight rating on the stock. Despite that rating, the analyst did highlight some potentially encouraging trends of the business.
Chatterjee wrote that, in his recent meeting with Super Micro executives, the company “dispelled concerns about shutting down operations in Malaysia.” He said the company’s expansion of operations there should “contribute positively to gross margins.” Chatterjee added that Super Micro said its customer base remains strong, with no signs of customers moving orders to other vendors, despite market speculation.
Super Micro has been grappling with the fallout from an August report by short seller firm Hindenburg Research, which accused the company of accounting malpractices, violations of export controls, and questionable relationships between top executives and Super Micro partners.
Following the Hindenburg report, Super Micro delayed filing its annual 10-K and most recent quarterly 10-Q reports to the Securities and Exchange Commission, putting the company at risk of being delisted from the Nasdaq.
Super Micro is reportedly being investigated by the Department of Justice in connection with the alleged accounting violations. The server maker’s accountant Ernst & Young resigned in late October, saying it was unwilling to be associated with the financial statements prepared by company management. And Super Micro’s fiscal first quarter earnings report on Nov. 5 missed Wall Street’s expectations.
Things began to look up for the server maker in late November after it submitted a compliance plan to the Nasdaq, fueling a massive rally. Even with the past two days’ declines, SMCI is up 65% from last month.
The company last week said an independent review of its business found no evidence of fraud or misconduct, sending shares up nearly 30% in a single day. The Nasdaq last Friday granted an extension to Super Micro, giving the company until Feb. 25 to submit its delayed reports to the SEC to avoid delisting.
