SMCI: Super Micro Stock Wipes Out 33% as Auditor Ernst & Young Bows Out

One-third of Super Micro’s valuation went up in smokes after its accounting firm bailed after months of internal jitters.

• Super Micro stock SMCI washed out one-third of its valuation in a single session Wednesday after its auditor — Ernst & Young — walked away from handling the company’s accounting and financial statements. Shares of the AI server maker plummeted 33% to $33.07 a pop, erasing $10 billion to land at a current market cap of $19 billion. The auditor’s resignation comes after months of internal turbulence for Super Micro.
• Ernst & Young bailed with a letter saying it was “unwilling to be associated with the financial statements prepared by management.” The accounting firm said it can “no longer provide the Audit Services in accordance with applicable law or professional obligations.” Ernst & Young was hired earlier this year but so far — ten months in — Super Micro hasn’t issued a single financial statement, raising investor suspicion over fraudulent activities.
• Super Micro has been drowning in hot waters — its share price has tanked more than 72% from its record high near $120 hit back in March (pre-split). The stock still remains above the flatline for the year with a 16% increase. To make matters worse, Ernst & Young also raised concerns over the Super Micro’s board independence from CEO Charles Liang and other members of management. In response, Super Micro said it doesn’t agree with the auditor’s judgement.