Super Micro Computer’s stock price fell sharply on Thursday after the Wall Street Journal reported that the U.S. Justice Department is investigating the server maker.
Shares of the company, which has a market capitalization of nearly $24 billion and has surged on investor interest in artificial intelligence, fell $54, or about 12%, in afternoon trading.
According to the magazine, the Department of Justice has opened an investigation into Super Micro, with the case still in its early stages, citing sources familiar with the matter.
The agency’s investigation followed a critical report in August on Super Micro by Hindenburg Research, an investment firm that specializes in short-selling, or betting that a company’s stock price will fall. Hindenburg’s report alleged “clear accounting signals, evidence of undisclosed related-party transactions” and other problems at Super Micro, a Silicon Valley maker of computer servers and storage technology.
According to the Journal, a prosecutor with the U.S. Attorney’s Office in San Francisco is seeking information that may be related to a former employee who accused the company of accounting wrongdoing and filed a whistleblower lawsuit against Super Micro in April. The Hindenburg report focused in part on the ex-employer’s allegations.
On August 28, the day after the Hindenburg report, Super Micro announced that it would file its fiscal 2024 annual report with the Securities and Exchange Commission late.
Super Micro declined to comment.
In a letter filed with the SEC on September 3, Charles Liang, founder and CEO of Super Micro, disputed Hindenburg’s claims.
“You may also have heard about a recent report from a short-selling hedge fund that contained false or inaccurate statements about our company, including misleading presentations of information,” he said. “We will address these statements in due course.”
Hindenburg and the Justice Department did not immediately respond to requests for comment.
