Super microcomputer (NASDAQ: SMCI) Shares fell in the last week of trading. According to data from S&P Global Market Intelligence, the stock price ended the period down 24.2% from the previous week’s market close.
Supermicro shares lost ground last week, coupled with news that the company might miss the filing deadline for filing its 10-Q report with the Securities and Exchange Commission (SEC). The stock price also took a hit afterward Cisco has announced more about its plans to compete in the artificial intelligence (AI) server market. Supermicro’s share price is now down 35% this year, and 84% from the all-time high it hit in March.
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To remain compliant with the SEC and trade on the major exchanges, publicly traded companies must file regular financial reports and disclosures. Since Supermicro has still not filed its annual 10-K report for the fiscal year 2024, which ended June 30, it was expected that the company would not be able to get the filing for the first quarter of the current fiscal year. time. But news that the server specialist’s 10-Q report will be postponed underlines a major risk factor for investors.
Because Supermicro’s 10-K was not filed within the grace period, the company’s shares are at risk of delisting. Nasdaq Stock market. In October, Ernst & Young stepped down as the technology specialist’s accountant and stated that it did not want to be associated with management’s financial representations. So far, Supermicro doesn’t appear to have hired a new auditor — and the key work in preparing its filings for the SEC won’t be able to continue until one is hired.
Making matters worse, Supermicro stock is starting to look riskier due to potential shifts in the company’s competitive position. In a quarterly report last week, Cisco shared more details about its push into the AI server market. Contrary to some previous expectations, Cisco will do this Nvidia‘s advanced graphics processing units (GPUs) at the heart of its servers. There had previously been reports that Nvidia was diverting GPU orders that would have gone to Supermicro to competitors in the space, and it appears that some of those orders are going to Cisco.
Supermicro stock started rising in after-hours trading on Friday, and is likely to open Monday’s daily session with big gains. The company is now expected to file a filing plan with the Nasdaq stock exchange that will allow it to avoid immediate delisting. If the plan is not submitted and accepted, the shares will be delisted from the stock exchange and traded over the counter.
There seems a good chance that this short-term scenario will be avoided. But many questions remain about the company’s financial situation – and the stock appears primed for more volatility.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Cisco Systems and Nvidia. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
Why Super Microcomputer Stocks Plummeted Again This Week was originally published by The Motley Fool
