Super Micro Computer (SMCI, Financial) shares soared 15% in pre-market trading on Tuesday after the company announced the appointment of BDO US, P.C. as its new independent auditor. The move comes amid recent turbulence, including the resignation of its previous auditor, Ernst & Young, and the looming threat of delisting from the Nasdaq exchange.
It also reported that the company had made a compliance plan to Nasdaq to appeal for filing of the annual and quarterly reports. It is intended to respond to the issues raised by the Nasdaq regarding the company's financial reporting, internal controls, and corporate governance. Nevertheless, investors remain skeptical of the company's continued potential despite the recent appointment of BDO US as its auditor.
These recent challenges have demoralized other investors and questioned the company's financial competency. This movement can be explained by the fact that the stock was trading higher in the pre-market because of the relief in the market, which was that a new auditor had been appointed, and the delisting issue had been eased to a certain extent. Thus, it is essential to state that the company still has several problems on the agenda: the problems identified by the former auditor and the problems of upgrading the corporate governance system.
