Information technology company Super Micro Computer (SMCI) saw shares of its stock undergo an extreme rally on Monday alongside the results of a review from an independent special committee. This committee was created to investigate and review the actions of the company’s audit committee. This came after Ernst & Young LLP, Super Micro Computer’s former registered public accounting firm, made claims about its operations in its resignation letter.
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Super Micro Computer’s independent special committee has completed its review and says that claims made in Ernst & Young LLP’s resignation letter aren’t backed by facts. The special committee also notes that there are no fraud or misconduct concerns in the audit committee or management of Super Micro Computer.
Super Micro Computer is also taking the special committee’s recommendations, such as hiring new leadership, including a new Chief Financial Officer, Chief Compliance Officer, and General Counsel. While it searches for new leaders, David Weigand will continue to serve as company CFO.
How This Affects SMCI Stock
SMCI shareholders are celebrating today’s news, with the stock rallying 25.92% higher as of this writing. That also comes with heavy trading of the shares, as more than 105 million have changed hands today. To put that in perspective, the company’s daily average trading volume over the last three months is 77.57 million units.
SMCI’s movement today also builds on a strong 2024 performance for the stock. The shares have climbed 42.56% year-to-date and are up 51.14% over the past 12 months. Today’s rally also largely reverses a dip the shares saw in late October.
Is SMCI Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Super Micro Computer is Hold based on two Buys, five Holds, and two Sells over the last three months. With that comes an average price target of $38.57, a high of $67.50, and a low of $15. This represents a potential 7.3% downside for SMCI shares.
