Inside Super Micro's Crisis: 5 Scenarios That Could Define Its Future (Rating Downgrade)

SMCI's stock fell over 45% following governance issues and auditor EY’s resignation, highlighting significant risks.
Ernst & Young cited concerns over SMCI's "integrity and ethical values," heightening scrutiny on financial controls and governance.
Scenarios range from appointing a Big Four auditor and timely filing to regulatory scrutiny and potential NASDAQ delisting.
A loan amendment with Cathay Bank grants SMCI until Dec. 31 to file financials but requires $150M in cash reserves.
SMCI’s ongoing issues suggest a wait-and-see approach until governance is improved, and a credible auditor is appointed.

peshkov

Investment Thesis

Since our last coverage of Super Micro Computer, Inc. (NASDAQ:SMCI), the investment landscape has changed considerably. While our initial thesis highlighted SMCI's strong position in AI infrastructure and its significant revenue potential from GPU sales, recent events

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":368656005439792,"tweetId":"368656005439792","gmtCreate":1730760140000,"gmtModify":1731030357255,"author":{"id":4114775922899662,"idStr":"4114775922899662","authorId":4114775922899662,"authorIdStr":"4114775922899662","name":"Yiannis","avatar":"https://community-static.tradeup.com/news/0196a755f37421d4c173301ca5159810","vip":8,"userType":8,"introduction":"Growth, Growth At A Reasonable Price, Value, Long-Term Horizon","boolIsFan":false,"boolIsHead":false,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":926,"starInvestorFlag":false},"themes":[],"images":[{"img":"https://static.tigerbbs.com/7d2e4e9caf073aa0d4e572874f5ff4b2"}],"coverImages":[{"img":"https://static.tigerbbs.com/7d2e4e9caf073aa0d4e572874f5ff4b2"}],"title":"Inside Super Micro's Crisis: 5 Scenarios That Could Define Its Future (Rating Downgrade)","html":"<html><head></head><body><ul>\n <li>SMCI's stock fell over 45% following governance issues and auditor EY’s resignation, highlighting significant risks.</li>\n <li>Ernst &amp; Young cited concerns over SMCI's \"integrity and ethical values,\" heightening scrutiny on financial controls and governance.</li>\n <li>Scenarios range from appointing a Big Four auditor and timely filing to regulatory scrutiny and potential NASDAQ delisting.</li>\n <li>A loan amendment with Cathay Bank grants SMCI until Dec. 31 to file financials but requires $150M in cash reserves.</li>\n <li>SMCI’s ongoing issues suggest a wait-and-see approach until governance is improved, and a credible auditor is appointed.</li>\n</ul>\n<p></p><img src=\"https://static.tigerbbs.com/7d2e4e9caf073aa0d4e572874f5ff4b2\">\n<p class=\"item-credits\">peshkov</p>\n<p></p>\n<div class=\"inline_ad_placeholder\"></div>\n<h2>Investment Thesis</h2>\n<p>Since our <a href=\"https://seekingalpha.com/article/4728342-super-micro-computer-rebounds-despite-sec-filing-delays\" target=\"_blank\">last coverage</a> of Super Micro Computer, Inc. (<span class=\"ticker-hover-wrapper\">NASDAQ:<a href=\"https://seekingalpha.com/symbol/SMCI\">SMCI</a></span>), the investment landscape has changed considerably. While our initial thesis highlighted SMCI's strong position in AI infrastructure and its significant revenue potential from GPU sales, recent events</p></body></html>","htmlText":"<html><head></head><body><ul>\n <li>SMCI's stock fell over 45% following governance issues and auditor EY’s resignation, highlighting significant risks.</li>\n <li>Ernst &amp; Young cited concerns over SMCI's \"integrity and ethical values,\" heightening scrutiny on financial controls and governance.</li>\n <li>Scenarios range from appointing a Big Four auditor and timely filing to regulatory scrutiny and potential NASDAQ delisting.</li>\n <li>A loan amendment with Cathay Bank grants SMCI until Dec. 31 to file financials but requires $150M in cash reserves.</li>\n <li>SMCI’s ongoing issues suggest a wait-and-see approach until governance is improved, and a credible auditor is appointed.</li>\n</ul>\n<p></p><img src=\"https://static.tigerbbs.com/7d2e4e9caf073aa0d4e572874f5ff4b2\">\n<p class=\"item-credits\">peshkov</p>\n<p></p>\n<div class=\"inline_ad_placeholder\"></div>\n<h2>Investment Thesis</h2>\n<p>Since our <a href=\"https://seekingalpha.com/article/4728342-super-micro-computer-rebounds-despite-sec-filing-delays\" target=\"_blank\">last coverage</a> of Super Micro Computer, Inc. (<span class=\"ticker-hover-wrapper\">NASDAQ:<a href=\"https://seekingalpha.com/symbol/SMCI\">SMCI</a></span>), the investment landscape has changed considerably. While our initial thesis highlighted SMCI's strong position in AI infrastructure and its significant revenue potential from GPU sales, recent events</p></body></html>","text":"SMCI's stock fell over 45% following governance issues and auditor EY’s resignation, highlighting significant risks. Ernst & Young cited concerns over SMCI's \"integrity and ethical values,\" heightening scrutiny on financial controls and governance. Scenarios range from appointing a Big Four auditor and timely filing to regulatory scrutiny and potential NASDAQ delisting. A loan amendment with Cathay Bank grants SMCI until Dec. 31 to file financials but requires $150M in cash reserves. SMCI’s ongoing issues suggest a wait-and-see approach until governance is improved, and a credible auditor is appointed. peshkov Investment Thesis Since our last coverage of Super Micro Computer, Inc. (NASDAQ:SMCI), the investment landscape has changed considerably. While our initial thesis highlighted SMCI's strong position in AI infrastructure and its significant revenue potential from GPU sales, recent events","highlighted":1,"essential":1,"paper":2,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/368656005439792","repostId":0,"isVote":1,"tweetType":1,"viewCount":84,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":["WRD","FUTR.UK"],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":777,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/368656005439792"}