Super Micro Computer (NASDAQ: SMCI) stock is getting crushed Wednesday. The company’s share price was down 21% for the day as of 2:15 p.m. ET.
Hindenburg Research published a short report on Supermicro yesterday, alleging that the company was a serial offender when it came to bad accounting practices. Unfortunately, the server-hardware specialist seems to have almost immediately lent credence to some of the criticisms in the bearish report. In a press release published this morning, the company announced that it would be delaying the filing of its annual 10-K report with the Securities and Exchange Commission (SEC) for the fiscal year ended June 30.
News that the financial filing is being postponed so that Supermicro can “complete its assessment of the design and operating effectiveness of its internal controls over financial reporting” is spurring big sell-offs for the stock today. But even with today’s pullback, the artificial intelligence (AI) stock is still up 41% year to date — and it’s heading for a stock split on Oct. 1.
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Is it time to buy Supermicro stock?
Supermicro stock was already a high-risk, high-reward investment. With the news the company will be delaying its 10-K report, the outlook has become even more speculative. In addition to news that Supermicro’s annual filing with the SEC will be delayed, the release of Nvidia‘s much-anticipated second-quarter results later today could be another major source of volatility.
With so much uncertainty on the horizon, it’s not surprising that investors are feeling skittish about Supermicro stock. But today’s pullback could be a worthwhile buying opportunity for risk-tolerant investors.
In the press release, Supermicro said that it had not made changes to the quarterly and full-year results that it published on Aug. 6. It’s still possible that the company will wind up making performance revisions, but the market may be overreacting due to news of the delayed filing coming so soon after Hindenburg published its critical report. With signs that demand for AI-tailored servers and other hardware remains very strong, treating today’s big pullback as a pre-stock-split buying opportunity could be a good move for risk-tolerant investors.
