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Super Micro Computer says Ernst & Young resigns as auditor, shares tank
Reuters ^ | October 30, 2024 | Reporting by Zaheer Kachwala in Bengaluru; Editing by Shreya Biswas and Devika Syamnath

Posted on 10/30/2024 7:13:55 AM PDT by SunkenCiv

Super Micro Computer (SMCI.O) said on Wednesday Ernst & Young had resigned as its auditor, sending its shares tumbling more than 30% and deepening investor worries about accounting practices at the artificial intelligence server maker.

The company in late August delayed the filing of its annual report, citing a need to assess "its internal controls over financial reporting", after Hindenburg Research disclosed a short position and made claims of "accounting manipulation".

Super Micro disclosed on Wednesday EY had in late July raised concerns about its governance, transparency and internal control over financial reporting, after which the company appointed a special committee and began an investigation into the matter.

The accounting firm decided to resign after receiving additional information from the review process...

Super Micro was a big winner in the generative AI boom as businesses bet on the tech needed to power applications such as ChatGPT. The company's market value surged from roughly $4.4 billion at the beginning of 2023 to a March peak of $67 billion, before suffering a drop in recent months.

"As far as auditor statements go, E&Y's SMCI resignation letter is about as strongly worded as I have seen," Nathan Anderson, the founder of Hindenburg, said in a post on X.

The Wall Street Journal reported in late September that the U.S. Department of Justice was investigating Super Micro.

(Excerpt) Read more at reuters.com ...


TOPICS: Business/Economy
KEYWORDS: ai; devikasyamnath; shreyabiswas; smci; supermicro; zaheerkachwala
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Super Micro Computer Inc
NASDAQ: SMCI
36.69 USD
−12.43 (25.31%)
Oct 30, 10:03 AM EDT

1 posted on 10/30/2024 7:13:55 AM PDT by SunkenCiv
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To: Eleutheria5; AdmSmith; AnonymousConservative; Arthur Wildfire! March; Berosus; Bockscar; ...
DJT is down a little today, but I still wish I'd listened to you. :^)

2 posted on 10/30/2024 7:17:03 AM PDT by SunkenCiv (Putin should skip ahead to where he kills himself in the bunker.)
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To: SunkenCiv

Those machines are stealing money to buy hookers and condos in Hawaii!


3 posted on 10/30/2024 7:18:41 AM PDT by blueunicorn6 ("A crack shot and a good dancer” )
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To: SunkenCiv

This company was always a ridiculous story. Unlike Nvidia, which has unique advantages in the AI space, super micro is just hosting which anybody can do and is doing


4 posted on 10/30/2024 7:19:26 AM PDT by montag813
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To: blueunicorn6

5 posted on 10/30/2024 7:21:28 AM PDT by Red Badger (Homeless veterans camp in the streets while illegals are put up in 5 Star hotels....................)
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To: SunkenCiv

6 posted on 10/30/2024 7:24:28 AM PDT by Red Badger (Homeless veterans camp in the streets while illegals are put up in 5 Star hotels....................)
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To: montag813

“This company was always a ridiculous story. Unlike Nvidia, which has unique advantages in the AI space, super micro is just hosting which anybody can do and is doing”

Wrong. They supply servers to others to host.


7 posted on 10/30/2024 7:24:36 AM PDT by TexasGator (FIXED! I. I I l I l l "l I l / .I lI . l I l l l I I l /l l . l)
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To: TexasGator

Meant to say that, but that’s what I get for using voice. However, Dell and umpteenth other companies do that same thing


8 posted on 10/30/2024 7:25:16 AM PDT by montag813
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To: montag813

9 posted on 10/30/2024 7:25:24 AM PDT by Red Badger (Homeless veterans camp in the streets while illegals are put up in 5 Star hotels....................)
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To: SunkenCiv
You can bet that WHATEVER happens at Ernst & Young, it will be BLAMED on the AI COMPUTER NOT on any PERSON!


10 posted on 10/30/2024 7:29:04 AM PDT by VideoDoctor
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To: SunkenCiv

For this to happen to a large cap company is unusual and troubling. Arthur Andersen withdrew an audit opinion of WorldCom. The latter collapsed a year later. Before the auditor’s move, WorldCom’s market cap was $4b. This was a ~$30b market cap firm. Even with inflation, much bigger than WorldCom.


11 posted on 10/30/2024 7:33:09 AM PDT by Zhang Fei (My dad had a Delta 88. That was a car. It was like driving your living room)
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To: blueunicorn6

Cool, how do get to Hawaii? ;^)


12 posted on 10/30/2024 7:42:04 AM PDT by SunkenCiv (Putin should skip ahead to where he kills himself in the bunker.)
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To: Zhang Fei; TexasGator; montag813; Red Badger; VideoDoctor

Thanks all.


13 posted on 10/30/2024 7:49:12 AM PDT by SunkenCiv (Putin should skip ahead to where he kills himself in the bunker.)
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To: SunkenCiv

here’s what hindenburg research found in august

https://hindenburgresearch.com/smci/


14 posted on 10/30/2024 7:55:49 AM PDT by catnipman ((A Vote For The Lesser Of Two Evils Still Counts As A Vote For Evil))
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To: SunkenCiv

My hat is off to E&Y for resigning as auditor. They are a good firm.

I used to work for them, and was impressed with the firm’s integrity.

It’s a tough position to be in. I was in the Board Room of a client that was listed on the stock exchange when we delivered the message that we found fraud that took them from an annual profit to a loss.

The CEO freaked out and threw a big wooden conference room chair across the room and smashed it on the wall. Our finding cost him his job.


15 posted on 10/30/2024 8:15:46 AM PDT by tired&retired (Blessings )
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To: montag813
super micro is just hosting which anybody can do and is doing

I like my SuperMicro-based computer just fine. I agree that they are not known for bringing anything new to the table, but their space, best I can tell is being the last one standing of the great non-gaming motherboard customized PC packagers. A lot of companies who make special purpose rigs don't want to be beholden to HPE, Lenovo or Dell, and Acer's line is not diverse and not as customizable, and Asus is really a gaming/home PC company. That leaves Super Micro. They are Taiwan, not Red China.
16 posted on 10/30/2024 8:39:19 AM PDT by Dr. Sivana ("Whatsoever he shall say to you, do ye." (John 2:5))
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To: tired&retired

Wow! Those chairs are probably not cheap, either.

Of course, in his previous CEO job, the company’s stock symbol was HSSY, so... :^)


17 posted on 10/30/2024 9:32:37 AM PDT by SunkenCiv (Putin should skip ahead to where he kills himself in the bunker.)
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To: catnipman

Heh, the name of that firm always makes me laugh!


18 posted on 10/30/2024 9:33:11 AM PDT by SunkenCiv (Putin should skip ahead to where he kills himself in the bunker.)
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To: SunkenCiv

For those inexperienced with trading: It always ebbs and flows like that. The ebb is called resistance, the flow support, and it comes in waves. When something is trending up, it flows more than it ebbs. When it’s trending down, the opposite. And you can make money either way, just by guessing right and acting on it.


19 posted on 10/30/2024 9:35:35 AM PDT by Eleutheria5 (Every Goliath has his David. Child in need of a CGM system. https://gofund.me/6452dbf1. )
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To: Eleutheria5
Yes, the stock price of well-run companies tends to go up, but not on a straight line.

There are companies with good prospects, and early on, they may operate at a loss. Will DJT ever have earnings?

There are two questions about DJT -- is it well-run (mgmt turmoil could be just growing pains, or it may not be; I don't think it is) and, is it going to be attacked through lawfare (I think that's a given; not only DJT itself, but DJT himself, and maybe shareholders as well).

20 posted on 10/30/2024 9:45:45 AM PDT by SunkenCiv (Putin should skip ahead to where he kills himself in the bunker.)
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