What Are the Potential Implications of Super Micro's Alleged Undisclosed Relationships?

Question

In what manner may the Super Micro’s purported non-reported connections with counterparts impact the company operations?

Answer 1

Should the allegations of having undisclosed relationships with related parties be proved as the case, it may mean that Super Micro is engaged in earnings manipulation by, for example, its gross margins being much higher than they should be. This could come about if their related parties charge Super Micro less than is warranted which would allow the firm to book higher profitability and obscure the assembly divisions losses and costs in the private companies’ financials. Shareholders as well as regulators would be worried about the clarity and dependability of the accounts prepared for Super Micro.

Comments

Alex, thank you for a very informative report. I sold my SMCI shares shortly after the Hindenburg report was released. Alex's report has shown that there is less than meets the eye in the Hindenburg report but the possibility of avoiding sanctions through a multitude of shell companies troubles me more. The SEC and the U.S. sanctions managers should be encouraged to investigate. Until then, I am on the sidelines.

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great report looks like people are still doing buisness with rusia and making profit , from your report the company is corrupted but in a way that makes profit without a smoking gun.
what are the risks in owning smci or buying now ?

waiting for dell report :)