The Justice Department is investigating Super Micro Computer, the Wall Street Journal reported Thursday, nearly a month after short seller Hindenburg Research alleged “manipulating accounting” at the AI server maker.
Shares of Super Micro fell about 12% after the report.
The WSJ report, which cited people familiar with the matter, said the investigation was at an early stage and that a prosecutor in a US attorney’s office recently reached out to people who may have relevant information.
The prosecutor has requested information that appears to be related to a former employee who accused the company of accounting violations, the report added.
Super Micro had late last month delayed filing its annual report, citing the need to evaluate its “internal controls over financial reporting,” a day after Hindenburg disclosed a short position and made allegations of “accounting manipulation “.
The short seller had cited a three-month investigation that included interviews with former senior Super Micro employees and court filings.
Hindenburg’s allegations included evidence of undisclosed related party transactions, failure to comply with export controls, among other issues.
The company had denied Hindenburg’s claims.
Super Micro on Thursday declined to comment on the report, while the DOJ said it could not confirm or deny the existence of such an investigation.
A Reuters review of tender documents earlier this year showed that Chinese entities bought high-end Nvidia chips embedded in server products made by several companies, including Super Micro, through resellers.
The US government has cracked down on the sale of such technology to China.
Super Micro has been a big winner in the generative AI boom as businesses bet on the technology needed to power apps such as ChatGPT, sending its market value to $67 billion in March from roughly $4.4 billion .
The rally in AI stocks has cooled since then, as investors realized the company’s heavy investment return would be slower than expected.
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