Nvidia Faces Class Action Lawsuit for Concealing Crypto Mining Revenue

Odaily News: A U.S. federal judge has approved the certification of a class action lawsuit filed by investors against Nvidia and its CEO Jensen Huang. The lawsuit alleges that between 2017 and 2018, Nvidia concealed the extent to which its gaming GPU revenue relied on sales to the cryptocurrency mining sector, involving over $1 billion.

Judge Haywood S. Gilliam Jr. ruled that Nvidia failed to prove that its statements regarding crypto mining revenue had no impact on its stock price. The court cited an internal email from a Nvidia vice president, in which the executive believed the company's stock price remained elevated due to previous related statements. In 2022, the U.S. SEC fined Nvidia $5.5 million for failing to disclose the impact of crypto mining on its business.

The plaintiffs pointed out that on November 15, 2018, Nvidia CFO Colette Kress admitted that the gaming business fell short of expectations and that inventory clearance in the crypto channel took longer than anticipated. Subsequently, Nvidia's stock price dropped approximately 28.5% over the next two trading days. The case was previously dismissed in 2021 but was reinstated on appeal. Nvidia's petition for review by the Supreme Court was unsuccessful. The class action certification covers investors who purchased Nvidia stock between August 10, 2017, and November 15, 2018. A case management conference is scheduled for April 21.