Super Micro Computer Inc. Review Completion

Investing.com — Super Micro Computer Inc (NASDAQ: SMCI) announced the completion of a review by an Independent Special Committee on Monday, concluding no evidence of misconduct by the management or board.

JPMorgan analysts noted some “modest lapses,” highlighting two key points to monitor following the independent review:

1. BDO’s Acceptance: The focus will now be on whether Super Micro’s new independent auditors, BDO, accept the findings of the special committee or initiate their own independent review.

   The server maker appointed BDO as its new auditor in mid-November due to persistent delays in filing its 2024 year-end report to the SEC.

2. Nasdaq Compliance: Investors should also observe whether the Nasdaq approves Super Micro’s request for an extension to regain compliance with listing rules. The company had indicated it would file its 2024 financials in November.

Super Micro’s shares surged nearly 29% following the independent committee review on Monday. The committee recommended that the company replace its Chief Financial Officer, appoint a Chief Accounting Officer and Compliance Officer, and enhance its legal department and compliance training.

Though Super Micro shares have risen about 47% in 2024, they are still recovering from significant declines after multiple delays in annual report filings. The firm faced accusations of accounting malpractice from Hindenburg Research.

Despite these challenges, the company is capitalizing on its involvement in the rapidly growing AI industry, selling servers designed for advanced AI applications.

JPMorgan recently downgraded the stock to Underweight.