Super Micro Computer, whose AI servers are used for websites and data storage, saw its shares drastically drop 12% on Thursday after the Department of Justice opened an investigation.
According to The Wall Street Journal report, the probe came after a Hindenburg Research revelation in August about the company’s short position accusing of ‘accounting manipulation’. However, the evidence still needs to be verified, which made investors doubtful of the market value of Super Micro.
The server maker’s customers include major AI algorithm promoters and developers such as Nvidia, AMD, and Intel. Moreover, a prosecutor in the U.S. attorney’s office in San Francisco is questioning a former employee, Bob Luong, who has previously accused Super Micro of financial violations.
Luong’s lawsuit alleged that the company improperly recognized revenue from 2020 to 2022. This included booking incomplete sales and shipping equipment to customers. Super Micro then took a few steps back and is hesitating to file its annual report of the fiscal year with the U.S. Securities and Exchange Commission, impacting its shares in the market.
There was no further comment provided to any news reporting agencies by Super Micro as the legal investigation threatens the company’s reputation. In comparison to these server maker shares, the stock of Nvidia has been consistently rising with minor downturns.
The AI boom has indeed helped many tech companies to grow rapidly and transform workflows. But this investigation indicates that in this AI race, if the internal financial audits are neglected, then it will have serious consequences.
Thanks for choosing to leave a comment. Please keep in mind that all comments are moderated according to our comment Policy.
