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Super Micro Could Get Delisted From the Nasdaq Stock Exchange, Analyst Says
By Angela Palumbo
Super Micro Computer plans a business update on Tuesday, but an analyst says Wall Street is more focused on the company’s risk of being delisted from the Nasdaq Stock Exchange.
After delaying its 10-K for the fiscal year ended June 30, Super Micro has until Nov. 16 to file or to submit a plan to the Nasdaq to regain compliance with listing rules.
“It arguably appears to be an uphill battle for SMCI to remain listed at this point,” Wedbush analyst Matt Bryson in a note on Monday. He slashed his price target on Super Micro to $32 from $62 while maintaining a Neutral rating.
Super Micro didn’t immediately respond to a request for comment.
Super Micro has had its share of challenges over the past few months. On Aug, 27, short seller Hindenburg Research published a report alleging it had found “glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.” Super Microhas since said in a securities filing the Hindenburg report contained false or inaccurate statements.
One day after the Hindenburg report, Super Micro said it would delay filing its 10-K for the fiscal year ended June 30. On Sept. 20, the company said it received a letter from Nasdaq stating it wasn’t in compliance with a listing rule requiring timely filing of reports with the U.S. Securities and Exchange Commission.
Then on Oct. 30, the company announced its accounting firm, Ernst & Young, had resigned. The firm said in the resignation letter that it was “unwilling to be associated with the financial statements prepared by management.” Super Micro said in a filing that it disagrees with this decision.
“We believe questions around EY’s [Ernst & Young] decision, SMCI’s ability to file its 10K, and a reported DOJ investigation will take precedence over SMCI’s quarterly report and guide,” Bryson wrote.