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 ...
Super Micro Computer Inc
NASDAQ: SMCI
36.69 USD
−12.43 (25.31%)
Oct 30, 10:03 AM EDT
DJT is down a little today, but I still wish I'd listened to you. :^)
Those machines are stealing money to buy hookers and condos in Hawaii!
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
“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.
Meant to say that, but that’s what I get for using voice. However, Dell and umpteenth other companies do that same thing
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.
Cool, how do get to Hawaii? ;^)
Thanks all.
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.
Wow! Those chairs are probably not cheap, either.
Of course, in his previous CEO job, the company’s stock symbol was HSSY, so... :^)
Heh, the name of that firm always makes me laugh!
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.
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).
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