Super Micro Computer Inc. (NASDAQ: SMCI), says that an external review of the company’s business has concluded without any evidence of financial misconduct on the part of the management or board of directors.
The AI servers company confirmed that no previous financial reports would have to be revised – a concern which weighed heavily on SMCI over the past few weeks.
Supermicro’s stock rose 35% after today’s announcement, as it helped ease investors’ concerns about the company’s governance and earnings issues.
Supermicro names a new Chief of Finance
Super Micro Computer’s stock has plummeted since Hindenburg accused the company of accounting manipulation. Ernst & Young resigned from its position as auditor for the company in October.
The AI firm said in a Monday statement that an independent review conducted by a special committee in collaboration Secretariat Advisors, a forensic accounting firm, and Cooley LLP, a law firm international, found no evidence of financial fraud.
The review did recommend that SMCI hire a new chief financial officer and shake up its legal leadership.
According to the press release of the company:
The board has instructed the management to hire additional experienced, senior talents commensurate with today’s Company size and complexity and to prepare it for future growth.
Supermicro shares have fallen 65% from their March high for the year.
SMCI is changing for the better
SMCI is already in the process of finding a new Chief of Finance to replace David Weigand.
According to a press release issued on Monday, Kenneth Cheung, its former vice-president of finance, will now serve as its new chief accounting officer.
Supermicro is starting to see a positive change in the overall situation.
It has already appointed BDO as its auditor and submitted a proposal to return to compliance with the Nasdaq minimum listing requirements.
Super Micro Computer can now report its audited finances as a result of the independent review.
On Monday, SMCI shareholders responded to this.
Is it too early to invest in SMCI?
Supermicro announced its preliminary results for the first quarter of its financial year in November.
The AI servers company reported that its sales increased by 181% year-over-year to $6.0 billion during Q1.
Experts had predicted a much higher $6.45 billion.
Quinn Bolton, an analyst at Needham, continues to see SMCI’s stock as rising to $60. His price target represents a 40% increase from here.
The investment firm is bullish about the liquid cooling market, and believes that Supermicro stock will benefit from the AI industry’s transition to liquid cooling.
Super Micro Computer Inc shares do not pay a dividend, but they are still listed.
This post Why did Supermicro stock (SMCI), rise 35% on Monday? This post may be updated as new information unfolds
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