Possibility of NASDAQ delisting for SMCI due to a sudden drop following the resignation of auditors this month?

Last week, accounting firm EY announced the resignation of the company's auditors, causing the company's stock price to plummet by 79% from its peak and further plummet.

"We can no longer trust the statements of management and the audit committee, and we have received recent information that makes us not want to be involved with financial statements created by management. Therefore, we are resigning," the accounting firm stated in the filing.

Super Microcomputer did not submit the financial statements that should have been submitted in August to the Securities and Exchange Commission. According to Nasdaq rules, the company must submit a plan to the exchange by November 20 to recover compliance. If approved, the deadline may be pushed back to early next year.

The share price of Super Micro Computer fell 2% on Tuesday, expanding the weekly decline to 48%. The stock price around noon Eastern Time was about $26.20.

This is not the first time Super Microcomputer investors have faced concerns about delisting.

Super Micro Computer was delisted from Nasdaq in August 2018 for failing to file financial reports on time, and announced a halt in trading of its stock.。

Wedbush analyst Matt Bryson stated that another question is whether the financial accounting difficulties will affect the company's fundamental business of selling server racks equipped with Nvidia's most powerful AI-capable GPU chips.Another question is whether the financial accounting challenges may impact the company's fundamental business of selling server racks equipped with Nvidia's most powerful AI-capable GPU chips, as mentioned by the Wedbush analyst.

"There are various opinions on whether concerns about SMCI's delayed application and the Department of Justice investigation will impact customer decision-making," Mr. Bryson said.

Wedbush rates Super Micro Computer as "hold", with a target stock priceof $32.as.