Supermicro, Accounting Manipulation Risk Resolved? "No Fraud Found"

"No Fraud or Illegal Activity Found"
Stock Price Soars 29% After Results Announcement

Super Micro Computer (hereinafter Super Micro), a US server manufacturer embroiled in accounting manipulation allegations, announced on the 2nd (local time) that there was no accounting fraud. Following this announcement, Super Micro's stock price surged 28.68% on the New York Stock Exchange.

Super Micro stated that the special committee, together with law firm Cooley LLP and forensic accounting firm Secretariat Advisors, found "no evidence that management or the board of directors committed fraud or illegal acts related to accounting issues," according to the investigation. This investigation was conducted after Ernst & Young (EY), which was responsible for Super Micro's accounting, resigned at the end of last October due to concerns about the company's financial statements and governance.

Super Micro explained that based on the investigation results, it is unlikely that they will need to restate the fiscal year 2024 annual report (10-K report) completed in June. Previously, Super Micro had not submitted the fiscal year 2024 annual report to the U.S. Securities and Exchange Commission (SEC), and on the 18th of last month, it submitted a compliance plan to the Nasdaq Stock Market. Bloomberg reported, "With Super Micro completing the internal investigation, a major obstacle to submitting audited financial statements has been removed."

However, Super Micro announced that it will appoint a new Chief Financial Officer (CFO) to strengthen corporate governance and prepare for future growth, citing some shortcomings with the current CFO, David Weigand.

Super Micro has been regarded as one of the biggest beneficiaries of this year's AI boom. This is because it supplies servers equipped with the latest chips from Nvidia, which holds 80% of the global AI chip market. In March, it was also included in the large-cap S&P 500 index.

However, after a short-selling firm released a report alleging accounting manipulation in August, and the company delayed submitting its annual report, the risk of delisting became apparent. Subsequently, after Super Micro submitted a compliance plan to Nasdaq last month, the delisting risk was temporarily resolved.

Following Super Micro's announcement on this day, the company's stock price on the New York Stock Exchange closed at $42, up 28.68% from the previous session. Super Micro's stock, which had once plummeted more than 80% from this year's high, has more than doubled since the low point last month.