Super Micro Computer’s stock price plunged on Thursday after the Wall Street Journal reported that the Justice Department is investigating the server maker.
Shares of the company, which has a market capitalization of about $24 billion, fell $54, or about 12%, in afternoon trading, boosted by investor interest in artificial intelligence.
The newspaper reported, citing people familiar with the matter, that the Justice Department has launched an investigation into Supermicro, which is in its early stages.
The agency’s investigation followed a critical August report on Supermicro by Hindenburg Research, an investment firm that specializes in short selling and betting on companies’ stock prices to fall. Mr. Hindenburg’s report alleged “apparent accounting flags, evidence of undisclosed related party transactions” and other problems at Supermicro, a Silicon Valley maker of computer server and storage technology.
Prosecutors with the U.S. Attorney’s Office in San Francisco are seeking information that could be related to a former employee who filed a whistleblower lawsuit against Supermicro in April, accusing the company of accounting violations, the paper said. It is said that there is. The Hindenburg Report focused in part on the claims of former employers.
On August 28, the day after the Hindenburg report, Supermicro announced that it would file a delayed annual report for fiscal year 2024 with the Securities and Exchange Commission.
Supermicro declined to comment.
Charles Liang, Supermicro’s founder and CEO, disputed Hindenburg’s claims in a letter filed with the SEC on September 3.
“You may also have heard about recent reports from short-selling hedge funds that contain false or inaccurate statements about our company, including the presentation of misleading information. ” “We will address these statements in due course.”
Hindenburg and the Justice Department did not respond to requests for comment.