Supermicro's share price fell by around 33 percent after its auditor resigned.

In its resignation letter, EY said it was “unwilling to be associated with the financial statements prepared by management.”

Supermicro
– Supermicro

The auditor said that "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."

EY was initially hired earlier this year and raised issues with the server maker's internal financial controls, governance, and forthcomingness in late July.

This led to Supermicro appointing a special board committee to investigate the company’s internal controls. It hired law firm Cooley and a forensic accounting firm to review the company’s internal controls, with the review still ongoing.

Supermicro has yet to issue its financial statements for this year, delaying them a day after short-seller Hindenburg Research claimed that it found evidence of undisclosed related party transactions, a failure to abide by export controls, and other issues.

Supermicro was temporarily delisted in 2018 for failing to file financial statements, and in 2020 was fined by the SEC for “widespread accounting violations." Hindenburg claims that most of the executives fired for being involved in the accounting scandal were rehired soon after.

In September, the Wall Street Journal reported that the Justice Department had opened an investigation into the company.

Prior to the investigation, short seller report, and accounting flags, Supermicro shares hit an all-time high in March as its liquid-cooled racks have proved highly popular in the generative AI boom.

Since then, shares are down some 72.15 percent, but are still up 15 percent year-to-date.