Super Micro Computer said Monday a probe by an independent committee cleared the company of any wrongdoing in connection with accounting allegations. Supermicro stock rocketed in midday trades.
Supermicro stock took a hit on a wave of news after a prominent short seller blasted the company for alleged accounting irregularities. SMCI stock dropped sharply after the company said it was delaying the release of its annual report and then announced that its accounting firm had quit.
But Supermicro, as the company is commonly called, said an independent special committee "determined that the resignation of the company's former registered public accounting firm, Ernst & Young LLP and the conclusions EY stated in its resignation letter were not supported by the facts."
Supermicro said the findings supported a preliminary finding that the company's audit committee "had acted independently and that there was no evidence of fraud or misconduct on the part of management or the Board of Directors."
SMCI stock rallied more than 28% to 41.99 in early afternoon trades, soaring past its 50-day line. But the stock, whose Relative Strength Rating has dropped from 99 just six months ago to 9, is still trading well below its 200-day average, according to IBD MarketSurge.
Before the accounting allegations, Supermicro stock had been soaring as it emerged as a key player in the artificial intelligence market.
