Supermicro hot-swaps auditor in hope of dodging Nasdaq delisting

Server maker Supermicro has appointed a new independent auditor and submitted a compliance plan to the Nasdaq stock exchange to avoid being delisted amid reports it is losing customers because of uncertainty over its future.

The San Jose-based hyperscaler supplier has engaged BDO USA, the American arm of one of the top five global accounting operations, as its auditor with immediate effect.

This latest move follows the earlier resignation of Ernst & Young, which previously served as Supermicro's auditor, over concerns about the company's accounting practices. The server biz was also more than two months late in filing its 10-K annual report and was at risk of being delisted from Nasdaq as a consequence.

"We are pleased to welcome BDO as Supermicro's independent auditor," president and CEO Charles Liang said in a statement. "BDO is a highly respected accounting firm with global capabilities. This is an important next step to bring our financial statements current, an effort we are pursuing with both diligence and urgency."

Supermicro disclosed that it has submitted a compliance plan to Nasdaq to support its request for an extension to allow the firm to regain compliance with the requirements for continued listing. It is understood that the business will remain listed pending Nasdaq's review of the compliance plan.

The company indicated it will be able to complete its Annual Report on Form 10-K for the year ended June 30, 2024, as well as its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024.

The news seems to have been welcomed by investors. Supermicro shares were reported to be up by 29 percent to $27.81 in pre-market trading in the US. This is still way down from the high of $122.90 they stood at earlier this year.

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As a longstanding supplier to many hyperscalers, Supermicro was well positioned to take advantage of the surge in demand for high-performance infrastructure to meet the AI craze.

Earlier this year, for example, Elon Musk's xAI startup was reported to have enlisted Supermicro and Dell to build an Nvidia-powered AI supercomputer, with each assembling one half of the racks. Supermicro may now have been dropped from the project because of the ongoing uncertainty, if some reports can be believed.

As The Register reported previously, the server maker is facing a whistleblower lawsuit over allegations it misreported revenues by prematurely booking sales and billing customers on incomplete orders. The Department of Justice was said to have taken an interest and begun gathering evidence.

The company also this month announced a new SuperCluster AI platform that crams Nvidia Blackwell-powered HGX B200 8-GPU systems into a liquid-cooled datacenter rack infrastructure, on show at the SC24 Supercomputing Conference in Atlanta this week. ®