Jim Cramer Says SMCI Stock Is A 'Sell' Amid Accounting Irregularities: Super Micro Computer Stock Has Fallen 66% In 6 Months — Here's What Technical Analysis Shows

Jim Cramer has censured Super Micro Computer Inc SMCI amid irregularities in its accounting, following a barrage of issues it has been facing since June 2024.

What Happened: Cramer, who is the host of ‘Mad Money’ on CNBC, during his show answered a question about Super Micro Computer and said, "Sell. It doesn't matter, I don't care…Accounting irregularities equal sell."

This goes back to mid-2024 when the company first missed filing the Form 10-K with the SEC, the annual financial report for the company's year ending June 30.

Subsequently, the short-seller Hindenburg Research released a damning report on Aug. 27, accusing SMCI of accounting fraud, self-dealing, and sanctions evasion. Following this the company has faced significant turmoil.

Ernst & Young resigned as SMCI’s auditor on Oct. 30 and the company missed the deadline for filing its Form 10-Q with the Securities and Exchange Commission for the first quarter of fiscal 2025 as well.

SMCI temporarily avoided delisting from Nasdaq in November by appointing BDO USA as its auditor and submitting a compliance plan. However, it was subsequently removed from the Nasdaq 100 index on Dec. 23.

See Also: Billionaire Investor Who Predicted The Dot-Com Crash 25 Years Ago Warns Of Another Market Storm Brewing In The US

Technical Analysis Indicates Selling Pressure On The Stock:

After wading through the flurry of issues in the second half of 2024, its shares have fallen by 65.99% over the last six months. Its price was 0.46% up to $30.67 in premarket hours on Wednesday.

The technical analysis of the company’s daily moving averages indicates bearish trends for the stock. Tuesday’s close of $30.53 apiece was below its short and long-term moving averages.

The eight and 20-day moving averages stood at $32.71 and 32.38, whereas, the 50-day average was at $31.75 according to Benzinga Pro data. The stock price was much below its 200-day simple moving average of $59.49, signaling a bearish trend.

The relative strength index of 43.78 meant that the stock was in a neutral zone and it was neither overbought nor oversold.

Apart from Cramer’s ‘sell’ call, the 17 analysts tracked by Benzinga had a consensus ‘hold’ rating on the stock. The average price target of $27.67 between the three latest issues by Goldman Sachs, JP Morgan, and Wedbush implied a 9.97% downside for SMCI.

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