"Audit storm" continues to ferment, and the AI tech giant that once surged tenfold in a year is facing the risk of being delisted by the exchange.

Due to corporate governance and ethical integrity being questioned, the former AI "demon stock" Super Micro Computer continued its sharp decline on Thursday, following a 33% plunge on Wednesday, falling over 15% at one point. The stock price plummeted to around $29 over two days, with the market cap dropping to $16 billion, falling below the $18 billion market cap threshold of the s&p 500 index.

Analyst Ming-Chi Kuo from TF International Securities analyzed that based on past experience, resignations in auditing/accounting are very serious matters, and the possibility of the stock facing a trading halt or delisting as the "worst outcome" is increasing:

"This will indirectly lead to a decline in Super Micro Computer's competitiveness and face even more severe survival challenges."

Kuo also added that considering Super Micro Computer's strong AI server design and manufacturing capabilities, there might be a major shake-up in the top management and board of directors, with the possibility of being acquired by other companies.

Is the AI monster stock "showing its true colors"? Super micro computer faced with higher delisting risks.

Super micro computer mainly sells high-performance servers for AI datacenters, with the strong demand for AI servers in the market being the main driver behind its stock price increase.

In early 2024, Super micro computer's stock price had a major outbreak, reaching $1229 per share on March 9, hitting a historical high. Based on a 12-month period, Super micro computer's stock price has soared a staggering 1300%, and the company was also successfully included in the s&p 500 index.

Investors' frenzy came to an end with a document on Wednesday. According to the 8-K document submitted by Super micro computer on Wednesday, EY questioned the company's commitments to integrity and ethics, only agreeing with part of the content in Super micro's 8-K document. Some media reports claimed that EY had actually resigned from the company's auditing work on October 24th.

Super micro company, on the other hand, stated its disagreement with the accounting firm's decision, and does not believe that "resolving any issues raised by EY" ​​would result in the restatement of the financial reports for the fiscal year 2024 or previous quarters. The company has started looking for a new audit firm.

Adding to the woes, hindered by Hindenburg's short-selling in August, Super micro computer has still not been able to submit its 10-K annual report for the period ending June 30 (due on August 29). According to nasdaq's rules, Super micro computer must either resubmit its annual report or restore compliance by November 16 to regain nasdaq's compliance.

HSBC analysts stated:

"We believe that, without an auditor, the company faces a higher risk of delisting, and hiring a new auditor also presents potential challenges."

Wedbush, an institution well-known for "promoting" the US technology sector, also stated that the latest developments have become a significant obstacle for companies to submit financial reports on time to avoid delisting.

Super Micro Computer announced on Wednesday that it will release the performance report for the first quarter of the 2025 fiscal year (third quarter of the 2024 calendar year) after the market closes on November 5.

Editor/Lambor