Why Supermicro Computer stock price plummeted again this week

super micro computer (SMCI 3.16%) The stock plunged in its final week of trading. The company’s stock closed 24.2% lower than the previous week’s market close, according to data from S&P Global Market Intelligence.

Supermicro’s stock fell last week following news that the company may miss the deadline to file its 10th quarter reports with the Securities and Exchange Commission (SEC). Afterwards, stock prices plummeted. cisco The company revealed its plans to enter the artificial intelligence (AI) server market in detail. Supermicro’s stock is currently down 35% year to date and 84% from the all-time high it reached in March.

Filing delays and new competitive pressures Supermicro

To comply with the SEC and continue to trade on major stock exchanges, public companies must file regular financial reports and disclosures. Given that Supermicro has not yet filed its annual 10-K report for fiscal 2024, which ended June 30, the company is not expected to file a report for the first quarter of the current fiscal year until December 2020. It is done. hour. However, the news that the server specialist company’s 10th quarter earnings announcement would be delayed was highlighted as a major risk factor for investors.

Because Supermicro’s 10-K was not filed within the grace period, the company’s stock is at risk of being delisted. Nasdaq stock market. In October, Ernst & Young stepped down as the technology specialist’s auditor and said it did not want to be associated with management’s financial statements. So far, it appears that Supermicro has not hired a new auditor, and major work on preparing SEC filings cannot proceed until one is hired.

To make matters worse, Supermicro stock is starting to look riskier due to potential changes in the company’s competitive positioning. In last week’s quarterly report, Cisco shared more details about its entry into the AI ​​server market. Contrary to initial expectations, Cisco nvidiaAt the heart of the server is an advanced graphics processing unit (GPU). It was previously reported that Nvidia was diverting GPU orders that would have gone to Supermicro to competitors in the space, and it appears that some of those orders may be going to Cisco.

What’s next for Supermicro Computers?

Supermicro stock began a rebound in after-hours trading Friday and is likely to post big gains when it opens the daily session on Monday. The company is now expected to file a filing plan with the Nasdaq exchange to avoid immediate delisting. If the plan is not submitted and approved, the shares are removed from the exchange and begin trading over-the-counter.

Such a near-term scenario seems likely to be avoided. However, many questions remain about the company’s financial health, and the stock is likely to see further volatility.