Though Super Micro Computer (NASDAQ: SMCI) is hardly out of the woods, it experienced something of a sudden recovery, first with a 15.93% rally on Monday, November 18, to its latest closing price of $21.54. The momentum continued into the extended trading session, pushing SMCI shares even higher.
In fact, the after-hours and pre-market SMCI stock rally has been strong enough that, should the current levels be retained, Supermicro shares will open at their highest price since late October. The tech giant is up 31.01% from its close to its press time price of $28.22.
The extended session rally can, in all likelihood, be wholly attributed to Super Micro Computer’s late Monday announcement it had not only appointed a new auditor – BDO USA, P.C. – but also submitted a compliance plan with Nasdaq that will enable the company to retain its listing.
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Why Supermicro’s announcement drove a 30% rally for SMCI shares
The announcement effectively killed two grim birds of prey with one stone. Apart from the damning Hindenburg Report report that triggered the original late August and early September SMCI stock market collapse, the resignation of Ernst & Young – the previous auditor – caused a plunge of nearly 30%.
Ernst & Young’s quitting was seen as particularly significant – and particularly dire – as the letter announcing the decision was seen as uncharacteristically harshly-worded, meaning many interpreted it as Supermicro’s situation being even more rotten than thought.
The delisting fears likewise came to a head by November 13 as Supermicro shares were nearing $20, and there was little hope for a filing of the belated Form 10-K and 10-Q for the year ended June 30, 2024, and quarter ended September 30, 2024, respectively.
Why Supermicro shares closed 15% up on Monday
Still, as evidenced by the original 15.93% surge on Monday preceding Supermicro’s announcements, the selection of a new auditor and the submission of the plan to Nasdaq were not the sole drivers of the rally.
In line with broader Street bullishness, the anticipation of the since-announced filing and selection were enough to drive SMCI shares higher.
Indeed, through Super Micro Computer’s recent issues, major firms and institutions maintained that the company, despite suffering from hurricane-force headwinds in the short-term, is likely to make a full recovery in the long-run and the underlying business remains healthy.
Extended session rally brings SMCI stock early 2024 levels
Whatever the eventual impact of the most recent developments ends up being – and whether Supermicro makes a full recovery or not – SMCI stock is far from its previous 2024 glory.
Near its highs in mid-march, Supermicro shares were more than 316% in the green year-to-date (YTD), while at the latest close, they were 24.55% in the red in the same time frame but are down only 1% at press time on November 19.
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