- Super Micro Computer (NDAQ:SMCI) stock sunk Wednesday after a short seller report accused it of “accounting manipulation,” among other things
- Hindenburg Research published “Super Micro: Fresh Evidence of Accounting Manipulation, Sibling Self-Dealing And Sanctions Evasion At This AI High Flyer,” which “found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.”
- Legal firms are coming out of the woodwork to claim a piece of the company on behalf of investors who suffered substantial losses
- Super Micro Computer stock opened trading at US$485.94
Super Micro Computer (NDAQ:SMCI) stock sunk Wednesday after a short seller report accused the company of “accounting manipulation,” among other things.
The artificial intelligence stock lost more than 26 per cent by midday trading, Eastern time.
Hindenburg Research published “Super Micro: Fresh Evidence of Accounting Manipulation, Sibling Self-Dealing And Sanctions Evasion At This AI High Flyer,” the summary of its three-month investigation, which “found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues,” as well as nepotism and sanction evasion.
The firm interviewed former senior employees, industry experts and a whistleblower lawsuit brought by Super Micro’s former head of global services, all leading to its short position on Super Micro.
The lawsuit made allegations against Super Micro of improper revenue recognition, recognizing incomplete sales and circumvention of internal accounting controls. Hindenburg also noted that “pressure to meet quotas pushed salespeople to stuff the channel with distributors using ‘partial shipments’ or by shipping defective products around quarter-end, per our interviews with former employees and customers.”
Now legal firms are coming out of the woodwork to claim a piece of the company on behalf of investors who suffered substantial losses, such as global plaintiffs’ rights complex litigation firm Hagens Berman, as well as Levi & Korsinsky, Block & Leviton, Pomerantz Law Firm and others.
Despite the surge of demand for answers on social media, the company has not responded to the Hindenburg report at the time of writing, but only announced that it expects it will not timely file its annual report on form 10-K for the fiscal year.
Earlier this month, Goldman Sachs issued a healthy price target for SMCI of US$675 with the overall price target consensus US$855.89 at the time and price of US$1,500 on the higher end.
Super Micro Computer, Inc. is a Silicon Valley-based provider of accelerated compute platforms that are application-optimized server and storage systems for a variety of markets, including enterprise data centres, cloud computing, artificial intelligence, fifth generation and edge computing.
Super Micro Computer (NDAQ:SMCI) stock opened trading at US$485.94. Though down more than 41 per cent over the past month, Super Micro stock has risen more than 57 per cent since this time last year.
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(Top photo: Super Micro Computer, Inc.)