Super Micro Computer shares plunge as EY steps down as the company's auditor

Shares of Super Micro Computer (SMCI) plunged on Wednesday after accounting firm EY resigned as the company's auditor following months of speculation about the company's accounting practices.

EY, one of the country's “Big Four” accounting firms, told Super Micro Computer's board that the decision was made “based on information that has recently come to our attention that has resulted in our discontinuing our involvement.” EY added that it was “not willing to be associated with the financial reports prepared by management.”

Super Micro Computer said it disagreed with EY's decision because the audit it hired EY to do last year had not yet been completed, and that it took seriously the accounting firm's concerns “as to whether the company has a commitment to shows integrity.”

EY's resignation follows months of speculation about Super Micro Computer's accounting

The resignation comes as Super Micro Computer shares have plummeted in recent months amid speculation about the company's accounting practices after the company delayed filing its annual 10-K report and a report from short-seller Hindenburg Research that said ” Accounting manipulation” and other problems alleged have broken down.

Last month, reports surfaced that the Justice Department had opened an investigation into Super Micro Computer's accounting practices following the Hindenburg Report.

Following EY's resignation, Hindenburg founder Nate Anderson said the company's resignation letter was “about as strongly worded as I've ever seen,” suggesting that EY's decision could lead to partners like Nvidia (NVDA) question future deals with Super Micro Computer.

Shares of Super Micro Computer fell nearly 30% to $35.71 in early trading Wednesday, although they have gained about a quarter of their value since the start of the year despite Wednesday's losses.