Super Micro faces the risk of delisting and exclusion from the S&P 500 due to audit issues.

November 6, 2024 0:00 JST

Server manufacturer, U.S. Super Micro Computer Inc. (SMCI), garnered attention this year as a stock related to artificial intelligence (AI). However, just 8 months after hitting its all-time high, its stock price has plummeted, raising concerns of delisting from the Nasdaq market and possible exclusion from the S&P 500 index constituents.
SMCI's stock price has plummeted by over 75% since March. The troubled company is scheduled to release its business report after the close of trading on the 5th. The focus is on how SMCI will fulfill the compliance obligations of Nasdaq after the Ernst & Young (EY) accounting firm resigned last week due to concerns about the company's governance and transparency. Previously, the U.S. Department of Justice launched an investigation, and short-selling investor Hindenburg Research revealed that it had taken a short position against the company.

In August, SMCi was unable to submit its annual report (Form 10-K), and its listing was already in jeopardy. According to Nasdaq regulations, the company is required to submit a plan to restore compliance by mid-November, and if the plan is approved, the deadline for submission can be extended until February 2025. However, with EY's resignation, the situation has become even more challenging.

Wedbush analyst Matt Bryson said in an interview, "Due to time constraints, I think it will probably be delisted." He stated, "How can you submit a 10-K within a few months without auditors?".
An analyst from S&P Global, who owns SMCI, Nasdaq, and S&P 500, declined to comment.