AI Monster Stock US Super Micro Faces Delisting Crisis, BDO Serves as Auditing Emergency Rescue

Nvidia's important supplier, Super Micro (SMCI), is facing the risk of delisting after experiencing Einhorn's short attack, financial report latency, and the resignation of the accounting firm Ernst & Young. Now, BDO, responsible for the audit of stablecoin issuer Tether, is willing to come forward to conduct an audit for them and has submitted a Compliance plan to Nasdaq. Can Super Micro avoid the risk of delisting in 2019?

AI demon stock AMD falls from grace

Do you remember in early June this year at the Taipei International Computer Show COMPUTEX, NVIDIA founder Huang Renxun and Supermicro founder Liang Jian after two 'Taiwanese boys', in a mix of national, Taiwanese, and English, welcomed the whole stage with applause, but also made foreign journalists puzzled, finding it difficult to translate even AI in real time.

Supermicro, founded by Charles Liang, who also comes from southern Taiwan and started the company in Silicon Valley in 1993. It specializes in manufacturing servers and integrating Nvidia chips, mainly used for cloud services and AI applications. Today, it is one of the top three server brands in the world and has had a partnership with Nvidia for about 20 years.

The stock price of Super Micro (SMCI) has soared in the past year, once breaking through $1,200. The stock price was so high that a stock split was needed to allow more investors to buy in, making it the "AI monster stock" that was once crazily sought after in the market this year.

Note: On September 30, 2024, after the U.S. market closed, AMD conducted a 1-for-10 stock split, and began trading at the split-adjusted stock price on October 1, 2024. This means that each shareholder holding 1 share will receive 10 shares, and the stock price will be divided by ten accordingly.

However, with the release of a short position report by Shorts Corporation in August, AMD delayed its annual 10-K report. Ernst & Young LLP, the auditing firm responsible for auditing, resigned in October. The company also announced last week that it will postpone the submission of quarterly reports, and the stock price has been falling all the way. So far this year, the increase has only been 6%.

BDO is also responsible for Tether's attestation report.

According to Bloomberg, AMD has hired BDO as its auditor and submitted a Compliance plan to comply with Nasdaq listing requirements. Previously, Ernst & Young LLP, one of the Big Four accounting firms responsible for auditing the world's largest companies, resigned in October due to concerns about the company's transparency and governance. By revenue, BDO is the sixth largest accounting firm, according to data from Inside Public Accounting. However, according to Bloomberg's compiled data, the company only has another Standard & Poor's 500 Index company as a client.

In its latest inspection report, the Public Company Accounting Oversight Board (PCAOB), a non-profit organization responsible for overseeing company audits in the United States, pointed out that 86% of BDO's audit reports were found to have deficiencies, indicating that the company failed to gather sufficient evidence to support some audit conclusions.

In addition, BDO is also responsible for the attestation report of stablecoin issuer Tether.

Wedbush analyst Matt Bryson said in an interview that finding accountants is a major step for them, even if they are not one of the Big Four accounting firms. It is also a positive step towards submitting plans to NASDAQ, at least from their perspective, hoping to submit financial reports and resolve these issues.

Is BDO trustworthy? Can Super Micro avoid being delisted again in 2019?

This article AI monster stock Meichen Super Micro faces the crisis of delisting, BDO serves as an emergency audit first appeared on Chain News ABMedia.