Super Micro extends last week’s gain, wounding short sellers

On Monday, Super Micro Computer (NASDAQ:SMCI) stock continued its upward trajectory following the company’s announcement of a strategy to prevent being delisted from the Nasdaq, which had previously fueled a significant rally. The server manufacturer’s shares experienced a 16% increase to $38.30, setting the stock on track for its highest closing value in nearly four weeks.

The momentum began last Monday when Super Micro Computer appointed BDO USA as its new auditor and disclosed its submission of a plan to Nasdaq requesting additional time to comply with listing regulations. This move prompted a sharp rise in its stock value. Over the past five days, the stock has soared 78%, although it remains 17% lower than its value 30 days ago.

Super Micro’s listing status became precarious after the company missed the filing deadline for its annual 10-K report in August, attributing the delay to an evaluation of “its internal controls over financial reporting.” This failure to meet Nasdaq’s filing requirements placed the company at risk of delisting.

The company has attracted attention from short sellers, including Hindenburg Research, which has accused Super Micro of “accounting manipulation.” Currently, with a high short interest representing 20% of the stock’s float and a days-to-cover ratio of 1.6, there is potential for a short squeeze should positive news emerge.

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