Super Micro Computer faced a significant drop of 25% in its stock value during morning trading on Wednesday, following the company’s announcement of a delay in filing its annual report. The tech company explained in a regulatory filing that they require additional time to assess the design and effectiveness of their internal financial controls up to June 30, 2024, the end of their fiscal year. This news came shortly after short-selling firm Hindenburg Research alleged accounting manipulation within the company, leading to a short position taken by Hindenburg, expecting a decrease in stock price.

The shares of Super Micro Computer plummeted to $409.48, a stark contrast to their peak price of $1,229 per share on March 8 of the same year. Hindenburg’s investigation revealed concerns around the rehiring of executives involved in a prior accounting scandal that led to Nasdaq delisting the company in 2018 due to the failure to submit financial statements. The Securities and Exchange Commission also charged Super Micro in 2020 for improper accounting practices, resulting in a $17.5 million civil penalty.

Despite the recent surge in interest in artificial intelligence-related products and services, Super Micro Computer has been entangled in these controversies. The company’s shares surged earlier in the year with a more than 143% revenue increase in the fourth quarter, totaling $5.3 billion compared to $2.2 billion in the same period in 2023. Hindenburg’s investigation involved interviews with former employees and industry experts, uncovering troubling accounting practices, undisclosed transactions, sanctions violations, and customer concerns.

In response to the Hindenburg report, Super Micro Computer stated that it does not engage in discussions regarding rumors or speculations. The company’s future outlook remains uncertain as it navigates these challenges while trying to restore investor confidence amidst the ongoing controversies and financial scrutiny.