SMCI: Super Micro Stock Crashes After Justice Department Slaps Probe on Server Maker

It’s been a devastating quarter for the server-making highflyer that had its wings clipped — more than half of its value is gone ($25B) in less than three months.

• Super Micro Computer stock SMCI plunged 12% on Thursday after The Wall Street Journal said that the US Department of Justice had opened a probe into the AI server maker. Following a damning report by short-seller Hindenburg, the DOJ is now looking into the company’s accounting practices and speaking to former employees with insight into possible accounting violations and other fraudulent activities.
• Last month, Hindenburg Research published a bruising report that said it looked under the hood of Super Micro’s accounting and “found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.” The news led to a selloff, which got extended a day later when the server maker failed to release its annual filing, saying it didn’t have enough time to prepare it.
• Super Micro enjoyed a fantastic first three months of 2024 and was later crowned as the top performer in the S&P 500 for the first half of the year. And that’s when things went south. This quarter alone has seen Super Micro shares drop 53%, erasing about $25 billion from its market cap. The company makes servers for household names in the AI space, including Nvidia NVDA, AMD AMD and Intel INTC.