Super Micro's stock plummets on reported Justice Department probe

By Tomi Kilgore

The stock, which was up 4% just before the report, tumbled enough to lead the S&P 500's losers on the day and over the past three months

Shares of Super Micro Computer Inc. took a deep dive in volatile trading Thursday, after the Wall Street Journal reported that the server maker and artificial-intelligence play was being investigated by the U.S. Justice Department.

The stock (SMCI) tumbled 12% Thursday, enough to pace the S&P 500 index's SPX decliners. It was halted three times for volatility during its selloff.

Just before the newspaper's report, which cited unnamed people described as familiar with the matter, the stock was trading up about 4%. And it was up as much as 5.7% at its intraday high of $484.36 reached just after 10 a.m. Eastern.

The company said in an email to MarketWatch that it "has no comment" about the report.

The report of the probe comes after a short seller published on Aug. 27 a report alleging accounting red flags, which was then followed by the company saying on Aug. 28 that its annual report would be delayed because it needed more time to check its accounting.

On Aug. 30, the company said the short-seller report made "false or inaccurate statements" about the company and included "misleading" presentations of previously disclosed information.

The company has been investigated by regulators over accounting practices before.

In August 2020, the company had announced the payment of a $17.5 million civil penalty to settle an investigation by the U.S. Securities and Exchange Commission over financial accounting and disclosures.

The once AI darling's stock has now plunged 53.4% over the past three months, enough to make it the S&P 500's worst performer over that period.

It has lost about two-thirds of its value since it peaked at $1,188.07 on March 13, which at that time reflected a 318% year-to-date gain.

-Tomi Kilgore

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09-26-24 1620ET

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