Key Points
US-based activist short seller Hindenburg Research LLC has released a new report alleging "accounting manipulation" in server manufacturer Super Micro Computer, and has announced it has taken a short position on the company's stocks on Tuesday, August 29, 2024.s)..
This new report led to Super Micro Computer's Nasdaq-listed shares closing 19.02% in the red after the trading session on August 28, 2024..
Hindenburg Research is an investment research firm that investigates various companies for aspects like financial irregularities, fraud, etc, and publishes a report after taking a short position on that company's stocks...
A short position, also known as short-selling of a company's shares is when an investor enters into a short selling arrangement with a broker wherein the investor borrows shares, sells them for the prevailing market price anticipating a fall in the share price (In this case, as an effect of the negative report), buys the same amount of shares at a lower price after the market price has fallen, and returns it to the person or entity they borrowed it from..
Related party suppliers such as Ablecom and Compuware, part-owned by CEO Charles Liang and controlled by his brothers, received $983 million from Super Micro over the last three years, providing components to Super Micro and then selling them back, leading to concerns about circular transactions..
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