Super microcomputer (NASDAQ: SMCI) The company’s shares were crushed on Wednesday. The company’s stock price was down 26.3% as of 11:30 a.m. ET, according to data from S&P Global Market Intelligence.
Hindenburg Research released a short report on Supermicro yesterday, accusing the company of repeating poor accounting practices. Unfortunately, the hardware company appears to have almost immediately given credence to some of the criticisms in the pessimistic report. In a press release this morning, the company announced that it would delay filing its annual 10-K report with the Securities and Exchange Commission (SEC) for the fiscal year ending June 30.
The announcement that Supermicro would delay its financial filing so it could “complete its assessment of the design and operating effectiveness of its internal controls over financial reporting” caused a sharp selloff in the stock today. But despite today’s pullback, the artificial intelligence (AI) stock is still up 41% year-to-date — and it’s headed for a stock split on October 1.
Is It Time to Buy Supermicro Stock?
Supermicro stock was already a high-risk, high-reward investment. With the announcement that the company will delay its 10-K report, the outlook has become even more speculative. In addition to the announcement that Supermicro’s annual filing with the SEC will be delayed, the release of NvidiaAnother major source of volatility could be the highly anticipated second-quarter results, due later today.
With so much uncertainty on the horizon, it’s no surprise that investors are wary of Supermicro stock. But today’s pullback could present an attractive buying opportunity for risk-tolerant investors.
In the press release, Supermicro said it did not change its quarterly and full-year results released on August 6. It is still possible that the company will eventually revise its performance, but the market may be overreacting due to the announcement of the filing delay so soon after the release of the critical Hindenburg report. With signs that demand for servers and other AI-enabled hardware remains very strong, viewing today’s sharp pullback as a buying opportunity ahead of the stock split could be a good move for risk-tolerant investors.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Nvidia. The Motley Fool has a disclosure policy.
Super Micro Computer Stock Is Falling Today — Is This a Buying Opportunity Ahead of Its Stock Split? was originally published by The Motley Fool
