Super Micro Computer’s stock price fell sharply on Thursday after the Wall Street Journal reported that the Justice Department is investigating the server maker.
Shares of the company, which has a market capitalization of nearly $24 billion and has been boosted by investor interest in artificial intelligence, were down $54, or about 12%, in afternoon trading.
The Journal cited people familiar with the matter reporting that the Department of Justice has opened an investigation into Super Micro, with the investigation in its initial stages.
The authority’s investigation followed a critical one Report in August about Super Micro by Hindenburg Research, an investment firm that specializes in shorting, or betting that a company’s stock price will fall. Hindenburg’s report alleged “glaring accounting flags, evidence of undisclosed related party transactions” and other problems at Super Micro, a Silicon Valley maker of computer servers and storage technology.
According to the Journal, a prosecutor in the U.S. attorney’s office in San Francisco is seeking information that may be tied to a former employee who accused the company of accounting violations and who filed a lawsuit against Super Micro in April. The Hindenburg Report focused in part on the former employer’s allegations.
On August 28, a day after the Hindenburg report, Super Micro said it would file its 2024 annual report with the Securities and Exchange Commission late.
Super Micro declined to comment.
In a Sept. 3 letter to the SEC, Super Micro founder and CEO Charles Liang disputed Hindenburg’s claims.
“You may also have heard about a recent report by a short-selling hedge fund that contains false or inaccurate statements about our company including misleading presentations of information,” he said. “We will deal with these statements in due course.”
Hindenburg and the Justice Department did not immediately respond to requests for comment.