At the Computex conference on June 5, 2024, Super Micro Computer’s CEO, Charles Liang, made a notable appearance in Taipei, Taiwan. Just recently, the company had the honor of joining the prestigious Nasdaq 100 in July. However, five months after that accomplishment, Super Micro faced a setback as it was announced they would be removed from the index, resulting in an 8% drop in their stock.
Late Friday, Nasdaq revealed that Super Micro would no longer be part of their index, which comprises the top 100 nonfinancial stocks and serves as the basis for the highly-traded Invesco QQQ Trust ETF. This development marks another twist in what has been a tumultuous year for Super Micro. The company’s stock price had previously skyrocketed to an all-time high of $118.81 in March, fueled by the surge in demand for their AI-powered servers. At its peak, Super Micro’s market capitalization exceeded $70 billion, a feat that qualified them for inclusion in the S&P 500.
Currently, Super Micro’s worth has dwindled to about $20 billion, a stark contrast to the median market cap of companies within the Nasdaq 100. Alongside Super Micro, Illumina and Moderna will also be exiting the index effective December 23. This reshuffle paves the way for newcomers like Axon Enterprise, Palantir Technologies, and MicroStrategy, the latter being known for its significant investments in bitcoin, which have propelled its stock over 500% this year.
Trouble for Super Micro began to surface in August when they announced a delay in filing their annual report with the SEC. This situation attracted attention from Hindenburg Research, a well-known short seller, which published a report highlighting potential “accounting manipulation” by the company. The situation took a turn for the worse in October when Super Micro’s auditor, Ernst & Young, resigned, leading to a dramatic 33% drop in their stock price. An independent committee, however, found no wrongdoing after a thorough investigation and instead suggested a CFO replacement. In November, Super Micro appointed BDO as their new auditor.
The company faced the threat of Nasdaq delisting once again due to ongoing delays in their financial reporting, but recently secured an extension until February 2025. Despite these challenges, Super Micro’s preliminary earnings report showed a revenue increase of 181% year-over-year for the third quarter, though it fell short of expectations.
“We’re facing tough competition, but I’m confident we’re in a solid position,” CEO Charles Liang shared during a conference call in November, alluding to rivals like Dell and HPE.
Be sure to watch our video detailing how Super Micro has appointed BDO as their independent auditor.
