Super Micro Computer’s stock has taken a beating, dipping to $28 per share after its auditor, Ernst & Young, decided to walk away. The server company, which joined the S&P 500 in March 2024, is now in hot water, possibly facing delisting from the Nasdaq. This isn’t the first time they’re dealing with this threat. They’ve got until November 16 to come up with a plan to regain compliance or face the axe again.

The trouble started back in July when Ernst & Young started raising red flags about Super Micro’s internal financial controls and governance practices. The company tried to smooth things over with a special board committee, but it wasn’t enough. Ernst & Young decided they couldn’t back the company’s financial statements anymore.

More bad news came when a short seller, Hindenburg Research, leveled serious accusations against Super Micro, including questionable business dealings with Russian and Chinese firms. The company’s stock took a nosedive, and Super Micro strongly denied the claims. Despite all this, their stock is still about 13% higher than it was last year.

Analysts, like Vijay Rakesh from Mizuho Securities, are pretty neutral about the whole situation. They’ve got a $45 stock price target, but there are some real concerns about Super Micro's internal financial controls. It’s a rough patch for the San Jose-based IT company that makes hardware for AI applications and partners with Nvidia.

This hasn’t been an easy year for Super Micro. They’ve seen high demand for AI, even making it into the Fortune 500. But now, they’re racing against time to prevent another Nasdaq delisting.

Super Micro's Stock Dives after Auditor Quits

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