Supermicro cut to Hold at Argus after E&Y resignation

Argus downgraded Supermicro (SMCI) to Hold from Buy. The firm cites the resignation of the company’s auditing firm Ernst & Young Global in the wake of the “serious allegations” from a short seller, which in turn has led to a Department of Justice investigation. Supermicro is still growing its topline faster than the peer group, but has also acknowledged a gross margin deterioration, the analyst tells investors in a research note.