More bad news for Super Micro Computer, Inc. (Nasdaq: SMCI): Shares sank more than 20% on Wednesday after the AI server maker missed earnings estimates, adding to its mounting problems. It also said it’s unsure when it will file annual results for the latest fiscal year.
SMCI’s stock price was down 18% by the time of the market close.
Looking ahead to Q2, the company forecast net sales in a range of $5.5 billion to $6.1 billion, missing Wall Street’s $6.79 billion estimates.
Just last week, SMCI shares plunged 32% on news that accounting firm Ernst & Young resigned as its auditor after disclosing in a U.S. Securities and Exchange Commission (SEC) filing that it was “unwilling to be associated with the financial statements prepared by [Super Micro Computer’s] management.”
Months earlier, Ernst & Young raised significant concerns over Super Micro’s internal controls, board independence, and accounting practices. In response to those initial concerns, Super Micro formed an independent “special committee” and launched a three-month investigation.
On Tuesday, Super Micro released its findings, saying it found “no evidence of fraud or misconduct on the part of management or the Board of Directors” in a company statement, further pushing the stock price down by double digits.
Another significant problem the company faces is that it’s at risk of being delisted by the Nasdaq exchange due to its delay in filing its Form 10-K with the SEC. Super Micro said it “remains unable at this time to predict when the Form 10-K will be filed.” (It was due back in August.)
Under the Nasdaq rules, Super Micro has 60 days from the date of the SEC notice either to file the Form 10-K or to submit a plan to Nasdaq to regain compliance with Nasdaq’s listing rules. (If a plan is submitted and accepted, the company could be granted up to 180 days from the Form 10-K’s due date to regain compliance. If Nasdaq does not accept the plan, the company can appeal the decision to a Nasdaq hearings panel.)
Either way, the news doesn’t bode well for the future of the stock.
Super Micro also said Tuesday “it intends to take all necessary steps to achieve compliance with the Nasdaq” and was “working with urgency to become current again” in filing financial reporting of its latest fiscal year.