Supermicro Shares Plunge 33% Amid 'Accounting Fraud' Allegations... "Delisting Concerns Arise"

This Year's Biggest Beneficiary of the AI Boom: Supermicro

Super Micro Computer (hereinafter Super Micro), a beneficiary company of the artificial intelligence (AI) technology boom, is engulfed in a wave of accounting fraud allegations. The accounting fraud suspicions, which began with a whistleblower who was a former employee, were ignited by a related report from a short-selling firm, followed by news on the 30th (local time) of the resignation of the accounting firm. Backed by this year's AI chip leader Nvidia and even included in the S&P 500 index, Super Micro's stock price has surrendered most of its gains this year due to the allegations.

On the 30th (local time), Ernst & Young (EY), which was responsible for Super Micro's accounting, announced, "Given the recently discovered information, we can no longer rely on the statements of management and the audit committee, so we are resigning." Specifically, EY cited the unreliability of Super Micro's financial statements as the reason for their resignation. EY had reported issues with Super Micro's internal financial controls, governance, and outlook at the end of July.

Super Micro hired EY around mid-last year. EY resigned after just a year and a half. Bloomberg pointed out, "It is generally uncommon for large companies to change their accounting firms." According to Bloomberg's data, more than half of S&P 500 companies have worked with the same accounting firm for over 25 years.

The accounting fraud allegations against Super Micro were first raised in April when a former employee filed a complaint accusing Super Micro and CEO Charles Liang of accounting violations. The U.S. Department of Justice reportedly launched an investigation into Super Micro's accounting fraud allegations last month. Additionally, in August, short-selling firm Hindenburg Research released a report accusing Super Micro of accounting fraud, escalating the situation. Hindenburg strongly criticized Super Micro in the report, calling it a "serial offender." The controversy deepened the next day when Super Micro announced it would delay submitting its annual financial report to the U.S. Securities and Exchange Commission (SEC).

As a server manufacturer, Super Micro has been considered 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. The stock price surged sharply, with a year-to-date increase exceeding 300% as of its peak in March ($118.81), and it was included in the large-cap S&P 500 index in March.

However, the stock price plummeted sharply each time the accounting fraud allegations intensified. Following the news of EY's resignation, Super Micro's stock price fell 32.68% on the New York Stock Exchange and dropped more than 2% in after-hours trading. After the short-selling report in August, the stock price plunged 19% in one day, and when news of the DOJ investigation broke last month, the stock price fell again by more than 10%. As a result, Super Micro's year-to-date gain stood at 16% based on the closing price that day, surrendering most of its gains this year.

Major foreign media outlets report that if Super Micro's accounting fraud is proven true, delisting from the stock exchange must be considered. For example, solar power company SunPower and fintech company Tingo Group faced accounting controversies and were delisted from the U.S. stock market this year.

This content was produced with the assistance of AI translation services.