Super Micro Computer (NASDAQ:SMCI) shares are falling Thursday following a report indicating the company is being probed by the Department of Justice following an August short report from Hindenburg Research.
The Details: According to a Wall Street Journal report, the company is being probed by U.S. Department of Justice following Hindenburg‘s report, published on Aug. 27, 2024. The short report included allegations made by former employee, Bob Luong, who also filed a whistleblower lawsuit in April against Super Micro and its CEO Charles Liang.
The Details: According to a Wall Street Journal report, the company is being probed by U.S. Department of Justice following Hindenburg‘s report, published on Aug. 27, 2024. The short report included allegations made by former employee, Bob Luong, who also filed a whistleblower lawsuit in April against Super Micro and its CEO Charles Liang.
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NewsTranscript
00:00SMCI, big news, of course, coming yesterday, was trading up in the morning when we were
00:06doing the show off of Micron's earnings.
00:08But then at 10.50 AM, around 10.45 more specifically, a headline hit from Wall Street Journal.
00:17The Justice Department probes server maker Supermicrocomputer, former employee accused
00:23AI server maker of accounting violations.
00:27The probe is at an early stage.
00:30This comes, of course, after a short report from Hindenburg a few weeks ago that accused
00:35them of some creative accounting, we'll say, and then they delayed the 10K, and then now
00:40you have the Justice Department coming in.
00:41So it does look like at the end of the day where there was smoke, there might be a fire.
00:46We don't know the exact details yet, but clearly SMCI has got some stuff going on and the stock
00:53got absolutely hammered down 55 bucks, 12.2% down another four bucks this morning, right
00:59at $400.
01:00Bounced where it needed to bounce, in my opinion, you got to the 382.
01:04You did undercut it at 373, but you quickly got back up above that headline.
01:09Algos are like, sell, sell, sell, sell, down 100 bucks in like 100 seconds.
01:17And then we bounced and stabilized a little bit here.
01:19So I think it's an overshoot, to be honest, I'm not saying I'm coming here buying SMCI
01:23today.
01:24There's a lot of things that we don't know.
01:26More information keeps coming, more headline risk here is there.
01:30But I think that 373 from yesterday is safe.
01:34Just my opinion.
01:35Boy, this is getting convoluted.
01:38This is getting convoluted because you don't know if this is just an acceleration of the
01:45other news that they have someone within the company coming out and testifying, or this
01:50is like a whole, you know, it's, it's keeps getting hit on this kind of news.
01:56So I, I, you know, it's the same headline, it's different investigation.
02:02I mean, we know this information.
02:05It's shocking that it goes down 100 points on this.
02:07I mean, you have all this stuff cooking here.
02:11It's kind of logical that the DOJ would get involved.
02:15I mean, don't you think?
02:16Uh huh.
02:17Yeah.
02:18Like it's kind of logical that the DOJ, so the algo sell off 100 points because they
02:21just see DOJ involved in the equals automatic sell.
02:24But I don't think it surprises anyone that the DOJ would get involved.
02:29So with everything that's been said in SMCI, in the media everywhere over the course of
02:34the last two months, uh, and since all this started, or six weeks since this has started,
02:41you think the DOJ isn't watching that they're not watching the media and everybody's talking
02:46about is SMCI cooking the books, you know, like, I honestly think this was to be expected.
02:52It's a huge sell off.
02:54I think obvious guy says, yeah, the DOJ was going to look into this.
02:58So we don't know anything has come of that DOJ finds a whole bunch of crooked stuff in
03:02there.
03:03And then Katie barred the door, the stocks, the books, stocks in trouble.
03:08But right now, all we know is there's investigations going on and we're trusting like in the, or
03:13if you're, if you're investing, if the case to invest, you're trusting that the I's are
03:17down and the T's are crossed.
03:18We've talked about this before as well.
03:20So I don't think, I think the a hundred points off was a little bit overdone yesterday.