Super Micro Computer (NASDAQ: SMCI) stock saw another day of big sell-offs in Thursday’s trading. The company’s share price closed out the daily session down 11%.

Supermicro stock fell today after Cisco made new comments about its plans to move into the artificial intelligence (AI) server market. Today’s valuation pullback followed a 6.3% decline in the company’s share price after a filing with the Securities and Exchange Commission (SEC) revealed that the tech specialist would be unable to meet the filing deadline for its quarterly 10-Q report.

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Supermicro’s share price is now down 62% over the last month and 36.5% year to date. The stock is also down 85% from the lifetime high it hit in March.

After riding high on surging AI-related demand to start 2024, Supermicro has seen a precipitous valuation decline. Along with huge sell-offs for the stock, the strong sales and earnings growth the company has reported mean its stock could look quite cheap by many traditional valuation metrics.

Trading at under 6.2 times this year’s expected earnings and less than 42% of expected sales, Supermicro stock could appear undervalued based on recent momentum for the business. But the company’s situation is simply too complicated to put much weight behind traditional valuation metrics.

The storm of controversies surrounding the company had its inciting incident in August when short-seller Hindenburg Research published a bearish report on the company, alleging repeated accounting violations. The next day, the company announced it would be delaying the filing of its annual 10-K report with the SEC to conduct a review of its internal controls over financial accounting. Missing the 10-K filing raised the possibility that its stock would be delisted from the Nasdaq exchange.

Then, in October, shareholders got hit with another gut punch. Ernst & Young (EY) resigned as the company’s financial auditor. EY said it decided to step back from the role 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 still has not filed its 10-K report, and it’s now on track to miss the deadline for its latest 10-Q report. The company is also reportedly being investigated by the Department of Justice. Making matters worse, the company’s competitive position in the high-performance server market appears to be weakening. Reports have emerged that Nvidia is sending graphics processing units (GPUs) that Supermicro was poised to receive to other players in the space.

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