Why the stock of super microcomputers is rising sharply again today

Super microcomputer (NASDAQ:SMCI) The stock is rising sharply in Monday trading. The tech company’s stock price was up 24.9% as of 11:45 a.m. ET.

Supermicro shares are enjoying big gains today after the company announced that an independent special committee found no evidence of fraud or misconduct by the technology specialist’s management team, board and audit committee. The company also said it would move forward with a number of the special committee’s recommendations.

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In August, short seller Hindenburg Research released a bearish report on Super Micro Computer, alleging repeated accounting violations and structural weaknesses at the company. The following day, Supermicro announced that it would delay the filing of its annual 10-K report with the Securities and Exchange Commission (SEC) and take steps to review and ensure the quality of its internal reporting practices.

In October, Ernst & Young announced that it was resigning as the company’s auditor, citing concerns about the reliability of management’s statements and whether the company’s audit committee was actually acting independently of the company. The news led to massive sell-offs in the stock and increased concerns that Supermicro’s shares could be delisted from the Nasdaq stock exchange. The stock is now experiencing some recovery momentum as there appears to be significant progress in resolving key issues.

Last month, Supermicro announced that it had hired BDO as its new accounting firm and had submitted reporting plans to Nasdaq to prevent delisting. Today’s press release about the special committee appointed by the company’s board creates another round of big gains for the stock. Check out this key quote from the recent announcement: “The key findings of the Special Committee are summarized as follows: Integrity of Management and Audit Committee: The evidence reviewed by the Special Committee did not raise any material concerns regarding the integrity of Supermicro’s management or audit committee or their commitment to ensuring that the Company’s financial statements are materially accurate.”

While the special committee’s findings should not be taken as a definitive sign that Supermicro has overcome recent controversies, investors understandably see the report as a bullish development. The stock is now up about 59.5% in the last month.

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