Super Micro Computer, Inc SMCI stock is trading below its 50-day moving average as it awaits removal from the Nasdaq 100 Index on December 23, 2024, joining the likes of Illumina, Inc ILMN and Moderna, Inc MRNA.
Palantir Technologies Inc PLTR, MicroStrategy Inc MSTR, and Axon Enterprise Inc AXON entered the coveted club as a replacement.
The Nasdaq-100 Index comprises 100 of the largest non-financial companies on The Nasdaq Stock Market.
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Established in January 1985 alongside the Nasdaq Financial-100 Index, which tracks the 100 largest financial stocks on Nasdaq, these indexes serve as benchmarks for financial instruments like options, futures, and funds.
The Nasdaq-100 undergoes an annual reconstitution each December, aligned with the quadruple witching expiration on Friday of the quarter.
Super Micro Computer stock plunged 62% in the last six months. Reportedly, the AI server company has enlisted Evercore to assist in raising capital.
The effort aims to avoid a potential delisting after the company missed its August deadline for filing its annual financial report while reviewing internal financial controls.
The company is considering private investment in public equity (PIPE) funding, which could attract interest from private equity firms. While PIPE funding provides a faster capital-raising method, it dilutes existing shareholders’ equity.
Concerns still need to be made about the profitability of Super Micro’s AI-optimized servers due to reliance on high-end chips from suppliers like Nvidia Corp NVDA.
Super Micro’s auditor, Ernst & Young, resigned in October over governance concerns. This led to a sharp decline in stock value and prompted an independent committee to investigate. By December, the committee found no evidence of misconduct, spurring a 30% rise in Super Micro’s stock.
The company appointed BDO USA as its new auditor to address delisting risks, submitted a compliance plan to Nasdaq, and began searching for a new finance chief based on the committee’s recommendations.
Super Micro, which faced scrutiny from a Hindenburg Research report and a U.S. Department of Justice probe, has until February 25 to file its delayed financial reports.
Super Micro Computer missed the revenue estimates for the last two quarters and the adjusted EPS consensus for the last quarter.
In July 2024, Super Micro Computer became a component of the Nasdaq-100 Index and the Nasdaq-100 Equal Weighted Index, replacing Walgreens Boots Alliance Inc WBA.
At that time, CEO Charles Liang highlighted Super Micro’s eco-friendly initiatives and AI growth opportunities during an interview with CNBC’s Jim Cramer.
Liang showcased the potential of their “liquid cooling” and “green computer” technologies to cut carbon emissions and reduce customer expenses.
He also shared his confidence in the transformative power of AI, predicting it could have a more significant impact than the industrial revolution.
The Nasdaq-100 Index underpins the Invesco QQQ Trust QQQ, which seeks to deliver investment results mirroring the index’s performance before expenses.
Price Action: SMCI stock closed lower by 8.26% to $33.44 on Monday.
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