shares Super micro computer (NASDAQ: SMCI)a struggling artificial intelligence (AI) server maker, rose today after the company finally gave investors a positive update from its independent special committee.
Supermicro, which has gone through a series of financial reporting setbacks, provided some good news and helped boost investor confidence.
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As a result, the stock was up 15.6% as of 10:23 a.m. ET.
The independent special committee, in cooperation with outside counsel and a forensic accounting firm, found no evidence of misconduct by management or the board, the company said in a press release this morning. It also said that the audit committee acted independently and that it did not expect to restate the financial results.
Among the Committee’s key findings were that the Audit Committee acted with appropriate independence, and that senior management’s reappointment of former employees was consistent with sound financial reporting and legal compliance.
The committee also considered issues raised by Ernst & Young, which resigned as the company’s auditor in October. These issues included the re-employment of employees who resigned in 2018 following a previous audit committee investigation, related party disclosures, export controls related to restricted countries, and revenue recognition practices.
Finally, management agreed to implement the Board’s recommendations, including beginning a search for a new CFO, as the committee found gaps in some of the guardrails for rehiring employees. Current CFO David Wiegand will remain in his position until the Board appoints a successor.
Supermicro also accelerated its search for a chief compliance officer, whose responsibilities are carried out by the chief financial officer, as well as its search for general counsel.
The committee’s report indicates that the company’s accounting problems are related to its recent rapid growth, and not to any malicious intent. This may be true, as businesses have seen significant growth in the age of AI, with revenues doubling year-on-year.
While the report is a step in the right direction for Super Micro Computer and offers some reassurance to investors, it did not provide an update on the expected timing of its premium release. 10 K Or 10-Q filings, which are the largest cloud hanging over a stock.
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