Super Micro Computer (SMCI) stock plunged as much as 18% early Wednesday after the company said it would delay the filing of its annual report for its fiscal year that ended June 30.
The announcement comes a day after short seller Hindenburg Research claimed, among other things, "accounting manipulation" at the artificial intelligence high flyer.
"SMCI is unable to file its Annual Report within the prescribed time period without unreasonable effort or expense," the company said in a statement. "Additional time is needed for SMCI’s management to complete its assessment of the design and operating effectiveness of its internal controls over financial reporting as of June 30, 2024."
Super Micro shares soared from $290 in early January to about $1,200 by March. The stock was added to the S&P 500 (^GSPC) in March.
Super Micro stock is now off more than 60% from its March peak but is still up 50% year to date. The company recently announced a 10-for-1 stock split effective Oct. 1.
The stock fell about 2% on Tuesday after Hindenburg said its three-month investigation "found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues." The firm also disclosed it had taken a short position in Super Micro.
The maker of data center servers and management software captured the attention of investors this year as it rode the AI wave. The company buys components from AI chipmaker Nvidia (NVDA).
In its report, Hindenburg claimed that despite a $17.5 million settlement in August 2020 with the SEC following an inquiry for "widespread accounting violations," Super Micro's business practices did not improve, and senior executives who had left amid the scandal were later rehired.
The report quoted a former salesperson: "Almost all of them are back. Almost all of the people that were let go that were the cause of this malfeasance."
"Even after the SEC settlement, pressure to meet quotas pushed salespeople to stuff the channel with distributors using 'partial shipments' or by shipping defective products around quarter-end, per our interviews with former employees and customers," Hindenburg said in its report.
"All told, we believe Super Micro is a serial recidivist."
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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