Waiting until after the closing bell to announce what seems to be clearly good news is one way to take charge of the news cycle! Super Micro finally filed its reports with the SEC.

The stock shot up in after-hours trading, because it is good news that they're not going to be delisted from the stock exchange. Jumping from about $46 to near $56 a share represents a lot of optimism from my perspective, but I remain skeptical. The filing states that there will be no restatement of previous financial filings, great! But as some in the above SeekingAlpha post have pointed out, there are some big yellow flags (emphasis mine from page 122):

Based on such evaluation, in connection with preparing the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K, management identified certain material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. The identified material weaknesses pertain to: (i) information technology general controls for certain IT systems that support the Company's financial reporting process were not appropriately identified, designed or implemented; (ii) controls to address segregation of duties conflicts were not properly designed and appropriately implemented; (iii) controls and documentation thereof, over the review and approval of manual journal entries were not properly designed and appropriately implemented to prevent unauthorized access to post journal entries; (iv) controls over the completeness and accuracy of information produced by the entity impacting multiple financial statement areas were not properly documented; and (v) management did not design, implement and retain appropriate documentation of control procedures to achieve timely, complete and accurate recording and disclosures across multiple financial statement areas including the timely identification and disclosure of new leasing arrangements and new related party transactions.

The above material weaknesses could have increased the risk of unauthorized access to certain information technology systems that support our financial reporting processes, manipulation of data that we use to produce our financial statements, and/or lack of complete and accurate information, which could lead to financial misstatements and affect our ability to report our information on a timely basis.

We have concluded that our internal control over financial reporting was not effective as of June 30, 2024 due to the existence of material weaknesses in such controls as described above. As of the date hereof, we have not remediated any of those material weaknesses.

The research report from Hindenburg Research last year followed by the resignation of Ernst & Young, now leading to this interesting statement in the 10-K filing still make me very weary of SMCI.

Regardless of Nvidia (NVDA) earnings tomorrow, I'm expecting a lot of volume after the market opens on the 26th. We'll see how strong the optimism for SMCI is and if these yellow flags discourage the stock's growth.