Hindenburg Research on Tuesday disclosed a short position in Super Micro Computer and alleged “accounting manipulation” at the artificial intelligence server maker, the latest by the short-seller whose reports have rocked several high-profile companies.
The report pits the short-seller, who has clashed with billionaire investor Carl Icahn and India’s Gautam Adani, against the server market, which has been one of the biggest winners from the boom in generative artificial intelligence.
Super Micro shares fell 3.5% in morning trading. The value of its stock has nearly doubled by 2024, after more than tripling last year.
Hindenburg said it found evidence of undisclosed related-party transactions, non-compliance with export controls, among other problems, citing an investigation that included interviews with former high-ranking employees and litigation records.
“(Super Micro) benefited from being a first mover, but still faces significant accounting, governance and compliance issues, and offers an inferior product and service that is now being eroded by more credible competition,” Hindenburg said in its report.
Super Micro did not immediately respond to a request for comment. Reuters could not independently verify the claims in Hindenburg’s report.
Close ties with chip giant Nvidia have allowed Super Micro, known for its liquid cooling technology for high-power semiconductors, to capitalize on rising demand for AI servers.
Although revenue has been rising, margins have been hit recently by rising server production costs and pricing pressure from rivals such as Dell.
Analysts have highlighted the company’s massive spending on supporting the next generation of artificial intelligence chips, including those sold by Nvidia.
The company’s shares have also been under pressure in recent months amid growing concerns that big tech companies could cut spending on artificial intelligence because of slow returns on the billions of dollars they are investing in the technology.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: August 27, 2024 | 20:55 IS
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