Super Micro Computer (SMCI) Faces Nasdaq Compliance Issues, But Delisting Is On Hold [Updated]

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Super Micro Computer Faces Nasdaq Compliance Issues

In a recent turn of events, Super Micro Computer (NASDAQ: SMCI) has received a notification indicating its non-compliance with Nasdaq listing regulations. This development raises significant concerns for the company’s stakeholders.

SUPER MICRO COMPUTER: RECEIVED LETTER FROM NASDAQ THAT CO IS NOT IN COMPLIANCE WITH NASDAQ LISTING RULE 5250(C)(1)

— First Squawk (@FirstSquawk) November 20, 2024

Details of the Non-Compliance Notification

According to reports, Super Micro Computer received an official letter from Nasdaq stating that the firm is “not in compliance with Nasdaq listing rule 5250(c)(1).”This notice was triggered by delays in filing critical financial reports, specifically:

Quarterly Report on Form 10-Q for the period ended September 30, 2024
Annual Report on Form 10-K for the period ending June 30, 2024

The company outlined the situation in a recent SEC filing, noting:

“On November 19, 2024, the Company received a notification letter (the “Letter”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1), due to the Company’s delay in filing its Quarterly Report on Form 10-Q and its continued delay in filing its Annual Report on Form 10-K.”

Impact on Stock Trading

Despite the compliance issues, Super Micro Computer stated that the notification “has no immediate effect”on the trading or listing of its common stock on the Nasdaq Global Select Market.

Steps Toward Compliance

Earlier this week, Super Micro Computer appointed BDO USA as its new auditing firm. Additionally, the company submitted a compliance plan to Nasdaq to request an extension to regain compliance with listing requirements. An update on this plan is still pending, as the company reported:

“Nasdaq received our compliance plan as you noted, but has not taken any action; it’s under review.”

Background: Recent Challenges for Super Micro Computer

Super Micro Computer’s current predicament can be traced back to August when Hindenburg Research released a critical report accusing the company of several malpractices. This led to delayed filings, particularly the annual report for the fiscal year 2024, which was due by August 30th, as the firm undertook an internal review.

Lastly, it’s important to mention that an earlier report mistakenly suggested that Nasdaq had rejected the company’s compliance plan. This error has since been rectified for clarity.

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