Supermicro shares took a big hit today when Ernst & Young quit as its auditor, making its stock fall over 30%. EY decided to leave because of their worries in July about how Supermicro runs things, shares information, and keeps track of its money. In August, Supermicro delayed its annual report as they were looking over internal financial controls following Hindenburg Research's allegations of accounting manipulation. Ernst & Young's letter to the Securities and Exchange Commission (SEC) about quitting says they can't trust what the company's leaders say anymore. They also don't want their name on the company's financial papers after discovering new information during their check. "We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management's and the Audit Committee's representations and to be unwilling to be associated with the financial statements prepared by management."

Supermicro doesn't agree with the accounting firm's decision, and they say fixing these problems won't mean they have to redo any of their financial reports from 2024 or earlier. Commenting on this subject, Nathan Anderson, the founder of Hindenburg, said in a post on X, "As far as auditor statements go, E&Y's SMCI resignation letter is about as strongly worded as I have seen." According to The Wall Street Journal, the Department of Justice is currently looking into the company. Supermicro will present its first quarter fiscal 2025 business update on Tuesday, November 5, 2024, at 5:00 p.m. ET / 2:00 p.m. PT.