Supermicro dropped out of the Nasdaq 100 stock index due to the fact that its market capitalization fell below $20 billion. This is not enough for inclusion in the index, writes Data Center Dynamics. Supermicro joined the Nasdaq 100 in July of this year. And since the company did not provide the regulator, the bank and the stock exchange with full quarterly reports, as well as a report for the year, on time, it still faces delisting from the stock exchange.
Following a Hindenburg Research report alleging accounting fraud and corporate governance malfeasance, the company delayed filing its annual report. Due to the refusal of Ernst&Young auditors to check the statements, the deadline for submitting the audited report was also missed. It is reported that Supermicro has found a new auditor – the BDO agency.
Having managed to agree with Cathay Bank on changes to the existing loan agreement related to the extension of reporting deadlines, the company was at risk of delisting from Nasdaq, since it did not have time to submit its annual report by November 16. But two weeks ago the stock exchange granted Supermicro an extension until February 2025.
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An independent special committee formed by Supermicro’s board of directors said it found “no evidence of fraud or misconduct” on the part of management or the board of directors. Although auditors Ernst & Young refused to deal with Supermicro, stating that they “did not wish to be associated with financial statements prepared by management,” the special committee reported that “Ernst & Young’s conclusions set out in its refusal letter do not are confirmed by the facts examined during the audit.”
Supermicro was previously temporarily delisted from the exchange in 2018 for failing to file financial statements and was fined by the SEC in 2020 for “widespread accounting irregularities.” Now the US Department of Justice is also conducting its own investigation into the activities of Supermicro. However, the company itself is not going to lose heart and is developing new products, while simultaneously looking for a new financial director.