SuperMicro (NASDAQ:SMCI) suffered yet another body blow today when their auditor, Ernst & Young, resigned, saying it was “unwilling to be associated with the financial statements prepared by management.”
That’s pretty intense. Auditing is very lucrative for big accounting firms, and is also a foot in the door for even better consulting and advising gigs. An auditor who publicly pulls out of a relationship and makes a statement about it is burning bridges.
Just changing auditors is often is accompanied by an announcement from management to calm investor concerns. For an auditor to actually go public is pretty extraordinary.
You may recall our earlier coverage of SuperMicro:
- SuperMicro Takes Another Torpedo Below the Waterline: The Hindenburg Research Short Seller Report Hits Hard (August 27, 2024)
- Is SuperMicro in Trouble? (August 7, 2024)
- SuperMicro: Is This a Bad Sign for the Server King or Was SprucePoint Just Completely Ridiculous? (March 19, 2024)
It’s a bad sign when one of the world’s most famous short seller issues a research report about you. It’s a horrible sign when two of them do it and your auditor resigns publicly.
So…buy on the dip?
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