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

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(<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. 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