Supermicro (SMCI, Financial), a prominent AI server manufacturer, saw its stock price plummet on Thursday following reports of a Justice Department investigation into alleged accounting irregularities. The probe comes in the wake of a critical report by activist short-selling firm Hindenburg Research, which accused the company of accounting manipulation and other issues.
The Wall Street Journal, citing unnamed sources, reported that the DOJ has launched an investigation into Super Micro Computer. This news sent SMCI stock tumbling more than 14% to 392.18, reaching an eight-month low during intraday trading.
The company's troubles began in August when Hindenburg Research published a report alleging accounting manipulation, export control failures, and customer issues. Since then, Supermicro has delayed filing its annual report with the Securities and Exchange Commission, citing the need for additional time to assess its internal controls over financial reporting.
This series of events has led to a significant decline in Supermicro's stock performance. Since late August, the stock has lost over 30% of its value. The company's Relative Strength Rating has also suffered, dropping from a perfect 99 three months ago to a current rating of 27, according to MarketSurge.
As Supermicro faces increased scrutiny, investors and industry watchers are closely monitoring the situation, waiting to see how these developments will impact the company's future in the competitive AI server market.
