The American server manufacturer Super Micro Computer had to announce on Wednesday that Ernst & Young (EY) is stepping down as auditor. This announcement led to a drastic stock price drop of over 30%, reducing the company's market capitalization by about 8 billion USD to around 20 billion USD.
EY stated in a filing letter to the Securities and Exchange Commission that the resignation is "due to information that has recently come to light and has caused EY to no longer be able to rely on the representations of management and the audit committee." In July, EY had already expressed concerns about governance, transparency, and the completeness of communication with the audit committee.
Super Micro announced in August 2023 that they would delay the release of financial results for the fiscal year 2024 after a short-seller published reports of potential financial statement manipulations. This development occurred after EY had taken over from Deloitte, the previous auditor, just last year.
Despite EY's resignation, Super Micro emphasized that the ongoing review of internal controls and governance structures—led by the law firm Cooley and the forensic accounting firm Secretariat Advisors—has no impact on the operational business development. "We currently do not expect a restatement of our financial results," the company stated. Additionally, they are working intensively on selecting a new auditor.
The losses reflect the uncertainty of investors, particularly given the strong dependence on key partners like Nvidia. Since the beginning of 2023, Super Micro's stock had experienced a tremendous increase of over 1,000% before losing about two-thirds of its value since March. This volatility is part of a broader trend in the AI infrastructure sector, where companies fluctuate greatly due to massive investments and highly competitive markets.
Analysts point out that EY's resignation could be a sign of underlying problems within the company, while the demand for server solutions in the AI sector remains robust. Despite current challenges, Super Micro remains a key player in the global AI infrastructure market, supported by strategic partnerships and a strong positioning in the rapidly growing segment.
