(Bloomberg) -- Super Micro Computer Inc. shares turned negative for the year on Thursday, as cascading concerns about the server maker’s finances continued to weigh on the stock.
Shares fell 16% on Thursday, building on the previous session’s slump of about 33%. The week’s selloff came after Ernst & Young LLP resigned as the company’s auditor, citing concerns about governance and transparency.
The stock had previously risen more than 300% to hit a peak in March of this year, making it one of the most prominent winners of investments in infrastructure related to artificial intelligence. It has now lost all of that advance, tumbling by more than 75% since the March peak.
The auditor news is the latest red flag for the stock. Earlier this year, a short seller alleged accounting problems at Super Micro, and the company subsequently delayed a 10-K filing, saying it needed more time to assess its internal controls.
Argus Research downgraded the stock to hold from buy on Thursday, writing that the company’s loss of its auditing firm and a US Department of Justice probe “mean that the stock no longer trades on fundamentals.”
Still, analyst Jim Kelleher remains positive on the company’s long-term prospects, and “will look to get SMCI back on the BUY list once the company engages with a new accounting firm, becomes timely on its filings, and resolves all matters before the DoJ.”
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