The “AI Demon Stock” is working hard to carry out its own “first aid.”

On Monday, Ultramicrocomputer announced that it had hired BDO as a new auditor and submitted a Nasdaq compliance plan to avoid delisting.

Affected by the news, US stocks of ultra-microcomputers, which closed up nearly 16% yesterday, once surged more than 40% after the market. As of press time, US stocks were up 38.12% in overnight trading.

Since this year, the stock price of ultra-microcomputers that have benefited from AI has taken a “jumping plane.”

After two months of crazy “runaway” at the beginning of the year, ultra-micro's stock price hit a “super bullish record” and soared by nearly 300%, quickly becoming a Wall Street upstart.

However, since March, the company's stock price has been falling from its peak. During this period, Super Micro experienced “snipping” by the famous shorting agency Hindenburg, suspected financial fraud, resignation of auditors, and facing delisting.

Up to now, the stock has accumulated a decline of more than 80% from its high point.

Appointment of a new auditor

On Monday EST, Ultra Micro announced that it has hired BDO as its independent auditor, and the appointment is effective immediately.

According to public information, BDO is a member company of BDO International, and BDO International is one of the top five accounting firm networks in the world.

With over 0.115 million professionals worldwide, the company is a recognized leader in auditing and assurance.

For Ultra Micro, BDO took over the audit work and solved its urgent needs. Ultrafine CEO Charles Liang said:

“This is an important next step in keeping our financial statements up to date, and we are working diligently and urgently to achieve this goal.”

Additionally, Ultra Micro has submitted a compliance plan to NASDAQ to support its request to extend its compliance period.

In the compliance plan, the company said it would be able to complete the annual report up to June 30 and the quarterly report up to September 30, but did not give a target date.

The relaxation period previously threatened by the company's delisting was until mid-November. If approved, the deadline may be extended until February next year.

However, analysts said that after EY resigned as an ultra-micro auditor in October, the schedule seemed to have been compressed.

According to NASDAQ regulations, it will continue to be listed on NASDAQ until the exchange “reviews compliance plans.”

Fate hangs in the air

After a series of negative losses before, an ultra-slight delisting crisis is imminent.

The company has not published audited results since May. If the microcomputer fails to submit its annual report as scheduled, it may be delisted from the NASDAQ Stock Exchange.

In August of this year, Supermicro was targeted by the well-known shorting agency Hindenburg due to “accounting manipulation” issues, and the company later postponed the release of performance reports.

However, a month after announcing the delay in submitting the report, Ultramicon received a “risk of delisting” notice from NASDAQ.

Shortly after October, former auditor EY resigned and questioned the company's governance and moral integrity.

Subsequently, Ultramicrocomputer began searching for a new audit firm.

In the company's latest fiscal quarter conference call, CEO Charles Liang also said that Ultra Micro is actively hiring new auditors.

At the time, Ultramicrocomputer also provided the latest investigation by an independent special committee appointed by the board of directors, indicating that it had found no evidence of fraud or misconduct on the part of the management or board of directors.

The Committee recommended that remedial measures be taken to strengthen internal governance and oversight functions, and it is hoped that a full report on the work completed will soon be issued.

As the company re-appoints new auditors, can Super Micro regain its strength?

Judging from performance, Ultramicrocomputer's revenue and Q2 guidance for the first fiscal quarter of fiscal year 2025 fell short of Wall Street expectations, which also led to a huge shock in its stock price.

However, the AI wave continues, and if delisting is successfully avoided, then this is certainly good news for shareholders.

Ultrafine's adjusted earnings for the 2024 fiscal year increased by nearly 90% to $2.21 per share, and revenue soared 110% to $15 billion.

Analysts expect the company's earnings to grow by more than 40% in fiscal year 2025, while they expect sales to soar slightly more than 70%.

Also, Ultra Micro has a very close relationship with Nvidia.

CEO Charles Liang also recently stated that Ultra Micro now has solutions using Nvidia's Blackwell platform.