Super Micro Computer (SMCI) stock jumped more than 30% Monday midday after the server maker announced that the final findings from an independent review of its accounting practices found no evidence of fraud or misconduct.
The company, which partners with Nvidia (NVDA) to provide high-tech servers with its AI chips, also said it will look for a new chief financial officer based on recommendations of the special committee conducting the review. Its current financial chief, David Weigand, will continue to serve in that position until his successor is appointed.
Super Micro said the review took over three months, with 68 witness interviews of current and former employees, management, advisors, and board members.
“The evidence reviewed by the Special Committee does not give rise to any substantial concerns about the integrity of the Company’s senior management or Audit Committee, or their commitment to ensuring that the Company’s financial statements are materially accurate,” the company said in a filing to the SEC.
Shares of the artificial intelligence high flyer have been on a coaster ride after an August report by short seller Hindenburg Research claimed, among other things, “accounting manipulation” at the company.
Following the report, Super Micro announced it would delay the release of its annual report. Then, in October, its accounting firm Ernst & Young (EY) quit, saying it was “unwilling to be associated with the financial statements prepared by management,” according to the resignation letter.
Monday’s filing said that the special committee doesn’t believe that EY’s conclusions “are supported by the facts uncovered by the Special Committee or the findings set forth in the Special Committee’s report.”
Last month, the company announced it hired a new auditor, BDO. It also submitted a compliance plan with the SEC to avoid delisting from the Nasdaq.
The stock has gained more than 100% since hitting a 52-week low on November 15. Shares are up about 39% year-to-date.
On Monday JPMorgan (JPM) analysts said they were maintaining an Underweight rating on the stock until more visibility into the company’s compliance increases.
“In our view, the next key watch points for investors to monitor include: 1) whether the new independent auditors, BDO, accept the findings of the Special Committee or decide to undertake their own independent review; and 2) whether Nasdaq supports Super Micro’s request for an extension of time to regain compliance with the Nasdaq continued listing requirements,” wrote the analysts.
