Super Micro, AI’s Latest Sensation, Targeted by Short Seller with a History of Big Wins
Ignore the name — there’s nothing little about the year Super Micro has had. By March, the server technology company was one of Wall Street’s best-performing stocks — up 300% on the year, graduating from the Russell 2000 to the S&P 500. However, despite booming AI and IT equipment sales, famous short seller Hindenburg Research has a warning — it might not be real.
- In a report published Tuesday, Hindenburg accused Super Micro of accounting manipulation, “violations of sanction and export controls,” and other serious issues.
- Lending credibility to the claims, Super Micro announced that it would delay filing its quarterly earnings and annual report, leading to a 30% drop in its stock since Monday.
Super Micro’s Super Big problem: If Hindenburg is correct, this wouldn’t be Super Micro’s first accounting-related run-in. In Aug. 2020, the corporation paid $17.5M to settle an SEC inquiry into its accounting deficiencies — and Hindenburg claims the company is knowingly engaging in illegal practices again, calling it a “serial recidivist.” The short seller argues that Super Micro’s governance, accounting, and compliance problems are too serious to ignore and that its inferior products and services could overshadow its banner year of success.
