Super Micro Computer Inc. (NASDAQ: SMCI), says it needs additional time to file the financial update for its September quarter.
The shares of the AI server provider are down 2% more on Wednesday.
SMCI is already at risk of being delisted as it has been unusually late with its annual report.
Supermicro received an notice of non-compliance on September 17 , th which allowed it 60 days in order to file its 10-K.
The company’s management must submit a plan by the end of the week to get back into compliance.
If you fail to comply, Super Micro stocks may be delisted from Nasdaq.
Why did Supermicro delay its 10-Q?
Supermicro’s shares have been in freefall since Ernst & Young refused its services as auditor, citing concerns about the company’s governance and financial control.
The California-based firm has confirmed that a special committee that investigated the flagged issues found no evidence of fraud.
SMCI, however, needs more time before filing its 10-Q to the Securities & Exchange Commission. It also needs to hire a new audit and complete an evaluation of its internal controls, according to its statement released on Wednesday.
Supermicro stock used to be touted as one the biggest beneficiaries of artificial intelligence rally.
The AI server maker counts Nvidia and AMD among its customers.
SMCI is drowning in a sea of bad press
Super Micro Computer has had a string of bad news in the last few months.
Hindenburg Research disclosed a large short position in SMCI earlier this year.
What’s alarming is the fact that Supermicro flatly refused to answer questions about corporate governance or EY resigning after it reported disappointing quarterly results unaudited last week.
The company has not reported audited financials for the last six months.
Mizuho analysts decided to suspend their rating and price targets for Supermicro after the earnings call due to a lack of clarity and forthcomingness.
Supermicro stock is a risky investment
Note that Super Micro Computer has been around for a while.
Hudson Labs has raised some notable ones as early as 2022 at this information technology firm.
It used artificial intelligence to create a “related-party concentration risk screen” where Supermicro was ranked as one of the most risky companies.
Kris Bennatti, the chief executive and founder of Hudson Labs, told CNBC that SMCI was also ranked higher for “other forensic risk” in a recent CNBC interview.
Wall Street rates Supermicro’s stock as a “hold”.
Analysts expect the AI firm to reach an average price of $37, which is a 75% increase from where it is now.
Having said that recent developments combined with the threat of delisting suggest SMCI share are only suitable for the most aggressive investors at the time of writing.
This post Supermicro stock faces imminent removal from the market: What investors need to know appeared initially on ICD
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