Ultramicrocomputer (SMCI)'s stock price plummeted recently, attracting widespread attention from the market. The resignation of its auditing agency Ernst & Young puts the company at risk of being delisted by Nasdaq again, which is closely related to the non-compliance notices received by the company and the allegations of short selling agencies. This article will deeply analyze the current difficulties faced by Ultramicro Computer, explore the reasons for its decline in stock prices, and make preliminary predictions on the company's future development prospects. It also analyzes the impact of its cooperation with Nvidia and the demand for AI technology on it.
Recently, Super Micro Computer (SMCI) stock price has been falling sharply. On October 31, the closing price of Super Micro Computer fell 11.97%, and the current stock price was US$29.11. The decline was due to the resignation of its audit agency Ernst & Young, which put the company at risk of being delisted by Nasdaq after a series of twists and turns.
In March this year, Ultramicro Computer successfully joined the S&P 500 index (S&P 500), but the company's operating situation has not been optimistic since then. According to a non-compliance notice issued by Nasdaq in September, Ultramicrocomputer must submit a plan to resume compliance by November 16, otherwise it will face a second delisting in five years.
Recently, EY's resignation on Ultramicro Computer has attracted widespread attention. The conflict between the two began in late July, with EY raising concerns about Ultramicro’s internal financial controls, corporate governance and transparency. In response, Ultramicro Computer formed a special committee to investigate related issues. But in the end, EY said in its resignation letter that it could not continue to support the company's financial statements because it no longer trusts the statements of Ultramicro management and the audit committee.
Despite this fluctuation, Ultramicro Computer has benefited from the high demand for AI technology in the past year and has successfully ranked among the Fortune 500 and ranked 498th. As a key partner of Nvidia, Ultramicro Computer integrates its technology in servers to support AI workloads. Super Micro CEO Liang Zhiqiang and Nvidia CEO Huang Renxun both immigrated to Taiwan, and the two have deep cooperative relationships.
However, in September, short-selling agency Hindenburg Research released a report accusing ultramicro computers of accounting problems and suspicious business practices, including suspected evasion of sanctions when exporting to Russian and Chinese companies. This report has taken a major blow to Super Micro's stock price. Ultramicro computers refuted this, saying the report contained misleading and inaccurate information and promised to clarify and respond to it.
Despite the sharp drop in stock prices recently, Ultramicro Computer's current share price is still about 13% higher than a year ago.
Key points:
Supermicro Computer's stock price plummeted 15% due to the resignation of an auditing agency, facing the risk of delisting of Nasdaq.
Ernst & Young decided to resign from its audit position due to concerns about corporate governance and financial control issues.
Despite the difficulties, Ultramicro Computer still benefits from demand for AI technology, with its share price rising 13% over the past year.
In short, Ultramicro Computer currently faces huge challenges, but its strategic position in the AI field and its cooperative relationship with Nvidia provide certain support for its future development. Whether you can successfully deal with the current crisis will determine your future destiny. Investors need to pay close attention to the company's subsequent announcements and actions.