Shares of Super Micro Computer (SMCI.O) soared about 23% in early trading on Tuesday, after the server maker sought an extension from Nasdaq for its delayed financial filings and appointed a new auditor as it looks to avoid being delisted.
Super Micro announced the appointment of BDO USA as its independent auditor, effective immediately, less than a month after Ernst & Young resigned after it raised concerns about the company's governance, transparency and internal control over financial reporting.
"BDO's arrival comes just in the nick of time to satisfy the Nasdaq's 60-day deadline to file a compliance plan but even if that plan is accepted the real test will be when those delinquent accounts (quarterly and annual reports) finally see the light of day," said Danni Hewson, head of financial analysis at AJ Bell.
If its filing plan is accepted by the exchange, Super Micro's deadline could be extended to February, allowing its shares to remain on the Nasdaq until a final compliance decision is made.
Should the plan fail to get approval, the company can initiate a process to review the decision by requesting a hearing from the exchange's Hearings Panel, which results in a 15-day stay of delisting with the possibility to extend up to 180 days.
Super Micro's potential Nasdaq delisting adds another layer of complexity to its turbulent year, despite opening 2024 on a positive note amid Wall Street's high expectations due to surging demand for its AI servers.
Through Monday's close, its shares have fallen about 24% this year and tumbled more than 82% from a record high in March.
In 2019, Super Micro was delisted from the Nasdaq exchange after it missed deadlines for annual and quarterly reports. It was approved to rejoin in 2020 after settling a U.S. Securities and Exchange Commission probe by paying a penalty of $17.5 million.
