Jim Cramer’s Lightning Round: 7 Stocks to Watch

4. Super Micro Computer, Inc. (NASDAQ:SMCI)

Number of Hedge Fund Holders: 33

When a caller asked if it was safe to get back into Super Micro Computer, Inc. (NASDAQ:SMCI), Cramer said:

“No, my view is accounting irregularities equal sell and I never go back. I will be willing, happily willing to miss another 20 points. It doesn’t matter. Accounting irregularities equals sell has saved me millions of dollars.”

Super Micro (NASDAQ:SMCI), a company renowned for developing and producing high-performance server and storage solutions, has recently faced significant challenges. According to WSJ, in September, the Department of Justice (DOJ) initiated an investigation into the company’s accounting practices, which resulted in a substantial drop in the value of its stock.

This situation worsened when Ernst & Young, the company’s auditor, resigned, citing concerns related to governance, transparency, and internal controls. Despite the resignation, the company disagreed with these concerns and maintained that no restatements of its financial reports would be necessary. In a more recent development, its shares saw an uptick after the company announced that a final review had found no evidence of fraud or misconduct by its management or board in connection with the accounting issues.

Furthermore, in response to the challenges it faced, Super Micro (NASDAQ:SMCI) indicated that it would be appointing a new chief financial officer. This move is part of a series of actions prompted by recommendations from a special committee, which suggested measures to strengthen the company’s corporate governance and ensure continued support for its rapid growth.