Super Micro Computer Inc SMCI shares are trading higher Tuesday, bouncing back after falling nearly 50% last week after the firm’s independent auditor raised governance and transparency concerns. The company is due to report earnings after the bell.
What To Know: Super Micro Computer stock got slaughtered last week after its independent auditor Ernst & Young sent in its letter of resignation as the company's registered public accounting firm, citing concerns related to governance, transparency, and completeness of communications.
Super Micro tapped Ernst & Young in March 2023 to audit the company's financials for its fiscal year ending June 2024. The auditor resigned before issuing a report on the company's financials or the company's internal controls over financial reporting.
“We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management's and the Audit Committee’s representations and to be unwilling to be associated with the financial statements prepared by management, and after concluding we can no longer provide the Audit Services in accordance with applicable law or professional obligations," the auditor said in its resignation letter.
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Super Micro noted that it doesn't expect any resolution of matters raised to result in any restatements of quarterly reports for the company's fiscal year ending 2024, or for any prior periods.
Super Micro is due to report financial results for the first quarter of fiscal 2025 after the market close on Tuesday. Analysts expect the company to report earnings of 75 cents per share and revenue of $6.45 billion, according to estimates from Benzinga Pro.
Investor attention is likely going to be focused on any updates from the company related to the accounting issues raised by Ernst & Young. Short seller Hindenburg Research also raised concerns of accounting manipulation at Super Micro in August. The company subsequently delayed its filing for the fiscal year ended June 30.
Super Micro hasn't filed financial results with the SEC since May, but the company said in an earnings presentation in August that revenue had doubled for a third straight quarter, per CNBC.
SMCI Price Action: Super Micro shares were up more than 300% in the first three months of the year driven by the company’s positioning in the AI space. As of Monday’s close, the stock had given back all of its gains for the year and was down about 8% year-to-date.
Super Micro shares were up 0.81% at $26.24 at the time of publication Tuesday, according to Benzinga Pro.
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