Shares of Super Micro Computer Inc. SMCI experienced a significant rise of 13.94% during pre-market trading on Monday, as per Benzinga Pro. This surge comes as the company faces potential delisting from the Nasdaq Stock Market.

What Happened: Super Micro is preparing to submit a proposal to Nasdaq to avoid delisting. The company, which has seen considerable success due to the AI boom, is under scrutiny regarding its operations. The proposal is expected to be submitted by Monday, aiming to maintain its trading status on the exchange, Barron’s reported on Monday.

The delisting threat arises from concerns over the company’s operations, despite its recent achievements in the artificial intelligence sector. By taking proactive steps, Super Micro hopes to avert the delisting risk and continue benefiting from the AI industry’s growth.

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Why It Matters: The potential delisting of Super Micro is linked to serious issues, including the resignation of its auditor, Ernst & Young, amid allegations of accounting irregularities and possible export control violations. Delisting could trigger an early repayment of up to $1.725 billion in bonds, posing a significant financial challenge for the company.

Furthermore, Super Micro is approaching a critical Nasdaq deadline, with its future potentially hinging on the upcoming earnings report from Nvidia Corp. NVDA. The server manufacturer, once a key player in Nvidia’s AI-driven success, now faces uncertainty as it navigates these challenges. The outcome of Nvidia’s earnings could provide insight into whether Super Micro can stabilize its situation or face further difficulties.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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