Super Micro Computer (NASDAQ:SMCI) is in free fall, with shares tanking 12% in premarket trading on Monday. This comes hot on the heels of Friday's announcement that it's getting booted from the Nasdaq-100 Index, effective December 23. Palantir (NASDAQ:PLTR), MicroStrategy (NASDAQ:MSTR), and Axon Enterprise (AXON are stepping in, replacing Super Micro, Moderna (NASDAQ:MRNA), and Illumina (NASDAQ:ILMN). For Super Micro, the move caps a brutal nine months that saw its stock lose nearly 70% of its value since hitting a record $118.8 in March. The company's troubles have snowballed, from missed earnings expectations to a delayed annual report filing, auditor resignations, and a Department of Justice probe triggered by short-seller allegations.

• Warning! GuruFocus has detected 5 Warning Signs with SMCI.

But the hits keep coming. Bloomberg dropped another bombshell, reporting that Super Micro has hired Evercore to explore capital-raising options, including equity sales, debt financing, or private equity investments. This isn't the company's first trip down the capital-raising laneback in March, it sold 2 million new shares to drum up $2 billion. Now, with governance concerns lingering and a February deadline to file overdue reports to avoid Nasdaq delisting, Super Micro is walking a tightrope. Meanwhile, its pivot to BDO as its new auditor underscores a desperate attempt to restore credibility, but investors are clearly skeptical.

Here's the bottom line: Super Micro is teetering on the edge. The Nasdaq removal is a glaring red flag, and while the potential capital raise could buy some breathing room, the company's underlying issuesgovernance gaps, financial reporting delays, and a shrinking market caparen't going away anytime soon. For investors, this might be a wait-and-watch game, but with every misstep, the odds of a turnaround get slimmer. The question now is whether Super Micro can stabilize or if it's destined to be a cautionary tale for growth stocks gone wrong.

This article first appeared on GuruFocus.