Key Takeaways
- Due to auditing concerns, Super Micro may be delisted from the Nasdaq and removed from the S&P 500.
- After expressing grave ethical concerns, Ernst & Young quit as auditors.
- Super Micro’s position in the AI hardware market may be impacted by the crisis.
According to Bloomberg, Super Micro, a once-promising AI hardware company, faces the possibility of being delisted from the S&P 500 and Nasdaq because of auditing problems.
The company, which is well-known for producing servers and other essential data center equipment, has been in hot water ever since a short-seller report raised questions about its accounting procedures early this year.
Super Micro’s financial integrity was questioned in an August report by Hindenburg Research, which caused the company to postpone its yearly 10-K filing and led to an investigation by the US Justice Department.
When Ernst & Young (EY), the company’s auditor, resigned last week due to grave ethical issues, the situation became more heated. Investor trust has been severely damaged by EY’s exit, as evidenced by Super Micro’s stock price falling more than 75% since March.
For Super Micro, these difficulties have reignited past controversies. According to Bloomberg’s 2018 allegations, the Chinese government planted chips in the company’s supply chain that might jeopardize the networks of large tech companies like Apple and Amazon.
Even though Super Micro refuted these claims and more research turned up no solid proof, the scandal damaged the company’s reputation for years to come.
Super Micro’s connections with important partners have also been damaged by the most recent financial crisis. According to reports, Nvidia, a significant customer, is moving orders to other vendors in order to prevent supply chain interruptions for AI servers, which puts additional strain on Super Micro’s operations.
Super Micro is racing to fix these growing issues as Nasdaq compliance deadlines approach. Stakeholders and investors are now anticipating the company’s next business update, which is anticipated at the conclusion of trading hours today. This information may clarify the company’s plans to restore market trust and maintain its position in the AI hardware sector.
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