NVIDIA’s lawyers have refused this week to share records with investors, who have alleged the company that they hid its reliance on the crypto-mining GPU industry in the year 2017. This has caused the stock price to fall after Bitcoin’s price bottomed at the end of the said year.
During a recent trial at the Court of Chancery of the State of Delaware, NVIDIA’s attorney Patrick Gibbs stated that the investors have not yet “met theor burden” or proof essential to force the firm to disclose information.
The investor, who has partly comprised several pension funds, has alleged that NVIDIA understated, to the tune of more than $1 billion, how much their business between May 2017 and November 2018 who have relied on selling graphics cards to cryptocurrency miners. They have claimed that internal messages at NVIDIA projected that the company held over 70% of China’s crypto-mining graphics card market.
When the crypto bubble popped by the end of 2017, NVIDIA has predicted a decline in revenue, causing its share price to plummet. The investors, claiming that they were misled, have filed their suit at the start of 2019.
But it was told in the court this week that the investors had no “credible basis” to mount this quarrel against NVIDIA. In a court document filed last Monday, the attorney has also added that the investors’ “attempt to plead more than just ‘smoke’ fails.”
They persisted: These are “sophisticated investors who experienced temporary losses when NVIDIA’s stock price fell; but the federal securities laws do not amount to an insurance policy for such losses.”
In May, the investors have sourced outside help from Prysm Group, whose economists “determined that NVIDIA had earned at least $1.728 billion from sales to miners from May 2017 through July 2018—meaning that defendants understated NVIDIA’s crypto-related GPU sales by $1.126 billion during the Class Period, all of which was contained in the Company’s Gaming segment.”
NVIDIA’s attorney has dismissed the report as without basis, purely speculative, and based upon “essentially arbitrary” assumptions.
It was reported that Vice-Chancellor McCormick has presided over this week’s trial and encouraged the parties to clarify which documents are sought by the investors and to deliberate redactions.
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