Why did Ultra Micro Computer drop by 19%

Ultra Micro Computer's stock decline of 19% can be attributed to a combination of factors:

1. Hindenburg Research Report: The company's stock was negatively impacted by a report from Hindenburg Research, which raised concerns about accounting manipulation, undisclosed related party transactions, and other financial irregularities. This led to a loss of investor confidence and a significant drop in the stock price.
2. Delayed Annual Report: Ultra Micro Computer's delay in filing its annual report on Form 10-K for the fiscal year ending June 30, 2024, has also contributed to the stock's decline. The company stated that the delay was due to the need for additional time for management to complete an assessment of internal controls over financial reporting.
3. Impact of Nasdaq-100 Addition: Being added to the Nasdaq-100 index can sometimes lead to a sell-off as investors adjust their positions to match the new composition of the index. This effect can be particularly pronounced when the index experiences a decline, as seen in Ultra Micro Computer's case.
4. Earnings Report Miss: The company's stock was also affected by the market's reaction to its earnings report, which showed a narrower gross margin than expected and lower-than-expected adjusted earnings per share. This miss led to concerns about the company's financial health and future performance.

In conclusion, Ultra Micro Computer's stock drop was a result of a combination of external pressures including the Hindenburg Research report, the delayed annual report, the addition to the Nasdaq-100, and the company's earnings report miss. These factors together led to a loss of investor confidence and a significant decline in the stock price.