Super Micro shares plunge 35% as auditor after raising concerns months before

Super Micro was hit with short seller report this year has delayed filing its financial statement for 2024 and under federal investigation.

Young and Ernst resigned as Super Micro auditor past week after raising concerns over company internal controls, board independence and accounting practices.

Super Micro makes computers that companies use as servers for websites, data storage and applications consisting AI algorithms.

The company customer consist of mega players in AI like AMD, Intel.

Super Micro has run into trouble with regulators over accounting practices.

It paid a $17.5 million penalty to Securities and Exchange Commission in 2020 after regulator alleged it prematurely and recorded revenue.

The company hired law firm Cooley and forensic accounting firm to review Super Micro internal controls.

The company said in regulatory filing.

Representatives for Super Micro and Ernst and Young did not return a request for comment.

EY had been hired to audit Super Micro for first time 2024 financial year the company added.

Super Micro has not issued its financial statements for this year and under federal investigation.

“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 and the Audit Committee representation.”

EY said in resignation letter EY concerns were raised before to short seller report that took aim at Super Micro financial controls and accounting practices.

The company hired law firm Cooley and forensic accounting firm to review Super Micro internal controls.

Review remains ongoing the company said in regulatory filing.