Super Micro Computer (SMCI) shares fell more than 9% on Wednesday, extending the previous day’s decline, despite an apparent attempt by its CEO to allay fears of a possible delisting by the Nasdaq.
At the Reuters Next conference on Tuesday, CEO Charles Liang said he is confident that Super Micro will not be taken private and that the company will meet the Nasdaq’s new deadline for making delayed filings with the U.S. Securities and Exchange Commission. Exchange Commission.
“Super Micro is committed to transparency and compliance with its regulators,” Liang reportedly said during the fireside chat on Tuesday.
Shares had started the week under pressure after JPMorgan analyst Samik Chatterjee maintained an ‘Underweight’ rating on the stock on Monday. Despite that assessment, the analyst highlighted some potentially encouraging trends in the company.
Chatterjee wrote that during his recent meeting with Super Micro executives, the company “addressed concerns about ceasing operations in Malaysia.” He said the company’s expansion of operations there “should contribute positively to gross margins.” Chatterjee added that Super Micro said its customer base remains strong and there are no signs of customers shifting their orders to other suppliers, despite market speculation.
Super Micro is grappling with the fallout from an August report from short-selling firm Hindenburg Research that accused the company of accounting malpractice, export control violations and questionable relationships between top executives and Super Micro partners.
After the Hindenburg report, Super Micro delayed filing its annual 10-K and most recent quarterly 10-Q reports with the Securities and Exchange Commission, putting the company at risk of delisting from the Nasdaq.
Super Micro is reportedly being investigated by the Department of Justice in connection with the alleged accounting violations. The server maker’s accountant, Ernst & Young, resigned at the end of October because he was unwilling to be associated with the annual accounts drawn up by company management. And Super Micro’s Nov. 5 first-quarter earnings report missed Wall Street expectations.
Things started looking up for the server maker in late November after it filed a compliance plan with the Nasdaq, sparking a huge rally. Even with the declines over the past two days, SMCI is up 65% from last month.
The company said last week that an independent review of its operations found no evidence of fraud or misconduct, sending its shares up nearly 30%. The Nasdaq granted the extension to Super Micro last Friday, giving the company until Feb. 25 to file its delayed reports with the SEC to avoid delisting.
