Super Micro Computer Inc.’s shares fell sharply on Thursday, dropping 12% after reports emerged that the US Department of Justice (DOJ) has opened an investigation into the company.
The probe, in its early stages, follows accusations from short-seller Hindenburg Research, which in August claimed to have found “fresh evidence of accounting manipulation” within the company.
Super Micro, a leading producer of servers used in artificial intelligence (AI) and other industries, has been a key beneficiary of the AI boom, supplying major players like Nvidia, AMD, and Intel. However, this recent scrutiny has raised concerns about its financial practices.
Hindenburg Research, which disclosed a short position in Super Micro in August, alleged multiple accounting irregularities, including undisclosed related-party transactions. Following these claims, Super Micro delayed filing its annual report with the US Securities and Exchange Commission (SEC), which led to a nearly 20% drop in the company’s stock. Although Super Micro denied the allegations, calling the report “false and misleading,” it has not filed its financials on time, adding to market uncertainty.
The Wall Street Journal reported that a prosecutor from the US Attorney’s Office in San Francisco has requested information regarding a former employee who previously accused the company of accounting violations. The company has faced regulatory scrutiny before, including a $17.5 million settlement with the SEC in 2020 over accounting practices.
Despite being a standout performer during the AI boom, Super Micro’s stock has now plummeted 53.4% over the past three months, making it the worst performer in the S&P 500 over that period. The company’s shares have lost nearly two-thirds of their value since peaking in March. Both Super Micro and the DOJ have declined to comment on the ongoing investigation.
CNBC, Warket Watch, and Bloomberg contributed to this report.
