Here's why Super Micro (SMCI) stock price is crashing

Core Insights - The stock of Super Micro Computer (SMCI) experienced significant volatility in 2024, initially rising due to the AI rally before facing a sharp decline following allegations of accounting malpractice [1][2][3]. Group 1: Stock Performance - SMCI shares rose from $28.55 at the beginning of the year to a high of $118.81 in mid-March, marking a 316.14% increase [1][2]. - By August 26, the stock price had fallen to $54.76, and after the release of a report by Hindenburg Research, it dropped further to a range of $38.65 to $49.12 [2][3]. - Following the resignation of the company's auditor, Ernst & Young, the stock plummeted to $18.01 [3]. - As of the latest update, SMCI shares recovered to $40.54, but experienced an 8.20% crash on December 10, with premarket trading showing prices as low as $38.99, totaling an 11.70% decrease [4][6]. Group 2: Regulatory and Management Changes - The NASDAQ granted Super Micro an extension until February 25, 2025, to file its delayed reports, which was anticipated after the company proposed a compliance plan [6]. - The appointment of Kenneth Cheung as the new chief accounting officer and plans to fill other key positions were viewed positively by the market [7]. Group 3: Market Dynamics - The potential reconstitution of the NASDAQ-100 index on December 13 may have contributed to the stock's decline, with speculation that SMCI could be replaced by companies like Palantir or MicroStrategy [8]. - Investors who purchased shares during the dip may be taking profits, as the stock has increased by 125.09% from its lowest point in mid-November [8].