Super Micro Computer Under Investigation by Department of Justice
Super Micro Computer's stock price plummeted on Thursday following a Wall Street Journal report revealing a Department of Justice investigation into the server maker. Shares of the company, valued at nearly $24 billion and buoyed by investor interest in artificial intelligence, plunged $54, or roughly 12%, in afternoon trading.
The Journal, citing anonymous sources, reported that the Justice Department has opened an investigation into Super Micro, with the probe still in its initial stages. This investigation follows a critical August report on Super Micro by Hindenburg Research, an investment firm specializing in short-selling. Hindenburg's report alleged "glaring accounting flags, evidence of undisclosed related party transactions," and other issues at Super Micro, a Silicon Valley-based manufacturer of computer servers and storage technology.
According to the Journal, a prosecutor at the U.S. attorney's office in San Francisco is seeking information potentially linked to a former employee who accused the company of accounting violations and filed a whistleblower lawsuit against Super Micro in April. The Hindenburg report partially focused on the ex-employee's allegations.
On August 28, a day after the Hindenburg report, Super Micro announced a delay in filing its fiscal 2024 annual report with the Securities and Exchange Commission.
In a September 3 letter filed with the SEC, Super Micro founder and CEO Charles Liang disputed Hindenburg's claims. He stated, "You may have also heard about a recent report from a short-seller hedge fund that contains false or inaccurate statements about our company including misleading presentations of information. We will address these statements in due course."
Neither Hindenburg nor the Department of Justice responded to requests for comment.