The Department of Justice is investigating supermicrocomputers. The Wall Street Journal reported Thursday, nearly a month after short seller Hindenburg Research alleged “accounting manipulation” by the AI server maker.
Following this news, Super Micro's stock price fell by approximately 12%.
The WSJ report, citing people familiar with the matter, said the investigation is in its early stages and that prosecutors from the U.S. Attorney's Office recently contacted people who may have relevant information.
Prosecutors reportedly requested information believed to be related to a former employee who accused the company of accounting violations.
Late last month, Supermicro delayed filing its annual report, citing the need to assess its “internal control over financial reporting,” a day after Mr. Hindenburg disclosed short selling positions and alleged “accounting manipulation.”
Short sellers were referring to a three-month investigation that included interviews with former senior Supermicro employees and court records.
Mr. Hindenburg's claims included, among other things, evidence of undisclosed related party transactions and non-compliance with export controls.
The company denied Hindenburg's claims.
Supermicro declined to comment on the report Thursday, while the Justice Department said it could neither confirm nor deny the existence of such an investigation.
A Reuters review of bidding documents earlier this year found that the Chinese company obtained high-end Nvidia chips for server products from several companies, including Supermicro, through resellers.
The US government is cracking down on sales of such technology to China.
Super Micro has been a big winner in the generative AI boom, with its market value rising from about $4.4 billion to $67 billion in March, as companies bet on the technology needed to power applications like ChatGPT. .
Since then, the rally in AI stocks has subsided as investors realized that the returns on big investments by companies were slower than expected.
