Super Micro Stock Plunges As Delisting Fears Rise: What to Know
Super Micro stock continues to slide after the AI company delayed the filing of its quarterly results, which could cause a delisting from the Nasdaq. Here's why.
Super Micro Computer (SMCI) is the worst S&P 500 stock Thursday, extending Wednesday's decline, after the AI server, software and infrastructure firm announced it would delay the filing of its quarterly earnings.
In a filing with the Securities and Exchange Commission (SEC) issued November 12, SMCI said it is unable to file its financial results for its most recent quarter ended September 30 "without unreasonable effort or expense."
The company had previously notified the SEC that it was unable to file its annual report for its year ended June 30, adding to the problems facing SMCI.
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Super Micro said it is "diligently working to select an independent registered public accounting firm" following the resignation of its previous accounting firm, Ernst & Young, on October 24.
In its resignation letter, Ernst & Young said it was "unwilling to be associated with the financial statements prepared by management," according to CNBC.
Will Super Micro get delisted?
The SEC requires publicly traded companies to file annual reports to maintain their listings on U.S. stock exchanges, which SMCI has yet to do for its year ended June 30, 2024.
SMCI has until November 16 to file or submit a plan to the Nasdaq Stock Exchange to regain compliance with its listing rules, according to Barron's. With that deadline just two days away and the company having yet to name an accounting firm, there is rising concern that SMCI will not regain compliance.
So, what will happen to the stock? "You still hold shares, the shares are still traded. They’re traded on the pink sheets [over-the-counter markets]," Wedbush analyst Matthew Bryson told Barron’s.
Here's what Wall Street's saying about Super Micro Computer
Given Super Micro Computer's struggles on and off the price charts – shares are down 77% in the past six months – Wall Street is on the sidelines when it comes to the tech stock.
Of the 12 analysts following the AI stock tracked by S&P Global Market Intelligence, one says it's a Strong Buy, two have it at Buy, seven call it a Hold, and two rate it Sell or Strong Sell. This works out to a consensus recommendation of Hold.
And amid SMCI's troubles, some analysts have washed their hands completely of the stock.
"Given the reputational and financial restatement risks raised by Ernst & Young's resignation as the company's certified public accountant, we have suspended our rating on shares of Super Micro," said Needham analyst Quinn Bolton in a November 6 note.
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