Super Micro shares plummet 22% after financial update alleviates investor concerns.

• Super Micro's stock reached its lowest point since mid-2023 following the release of unaudited quarterly results, which exacerbated investor worries.
• Weaker-than-expected revenue was indicated in preliminary results for the last quarter, along with light company guidance.
• The company recently lost its auditor and faces risk of a Nasdaq delisting.

On Wednesday, shares of the embattled server maker plummeted 22% to their lowest level since May of the previous year after the company released disappointing unaudited financials and failed to provide specific plans to maintain its Nasdaq listing.

The stock's market cap has been reduced by $57 billion after it dropped to $21.55 in early afternoon, representing an 82% decline from its March high.

Last week, Super Micro experienced its worst week on the market in its history following the resignation of its auditor, Ernst & Young, the second accounting firm to withdraw in under two years. The company is facing accusations from an activist of accounting irregularities and allegations that it has shipped sensitive chips to sanctioned nations and companies, violating export controls.

Super Micro hasn't filed audited financials since May and is at risk of being delisted by Nasdaq if it doesn't report results for the latest fiscal year to the SEC by mid-November. The company announced on Tuesday that it doesn't know when it will file annual financials.

Super Micro is currently in the process of hiring a new auditor, as stated by CEO Charles Liang during a call with analysts. The company did not discuss any questions related to Ernst & Young's decision to resign or address corporate governance issues during the call.

Mizuho analysts stopped covering the stock on Wednesday because they did not have access to complete and audited financial statements. Meanwhile, Wedbush analysts, who have a hold rating on the stock, said the report was unclear and did not provide enough information.

"While management appears fully committed to finding an auditor and resolving its late filing status, the extent of the challenges in achieving this objective remains uncertain."

Liang stated on the call that the company is "urgently working to update its financial reporting."

Super Micro reported net sales of between $5.9 billion and $6 billion for the quarter ending Sept. 30, which is below analyst expectations of $6.45 billion but still represents an 181% increase from the previous year. The company's growth has been driven by its shipment of servers containing processors for artificial intelligence.

In 2023, Super Micro's stock price increased by 87%, and in the following year, it experienced a 246% increase, reaching a peak of $118.81 in March after being included in the S&P 500 index.

The latest Nvidia GPU, Blackwell, has seen strong demand since its recent release and is currently shipping.

Liang stated that Super Micro is constantly requesting information from Nvidia about when Blackwell revenue will be reflected in their financials, and that the two companies maintain a close working relationship.

Liang stated that although our capacity is prepared, we lack sufficient new chips.

Did the company's plans for constructing Blackwell-based servers alter, potentially implying that other server manufacturers could gain extra capacity or Nvidia GPU allocations at Super Micro's expense?

""We have a deep relationship with Nvidia, and we have multiple state-of-the-art projects in progress. We've spoken to Nvidia and they've confirmed they've made no changes to allocations. We maintain a strong relationship with them and don't expect that to change," said CFO David Weigand."

Super Micro's revenue forecast for the December quarter was below analyst estimates. The company expects revenue to be between $5.5 billion and $6.1 billion, which is lower than the $6.86 billion average estimate. Additionally, the company anticipates adjusted earnings per share to be between 56 cents and 65 cents, which falls short of the analysts' expectation of 83 cents.

Ernst & Young raised concerns about Super Micro's management, which led to a three-month investigation by a special committee. The committee found no evidence of fraud or misconduct from management, according to the company.

The Committee has recommended remedial measures for the Company to improve its internal governance and oversight functions, and the Committee anticipates submitting the final report on the completed work this week or next, according to Super Micro. The company stated that it will take all necessary actions to maintain its listing on Nasdaq.

WATCH: Super Micro shares down on earnings