NVIDIA Faces A Class Action Lawsuit for Making False and Misleading Statement on Their Mining Business
December 28, The Schall Law Firm, an America-based shareholder rights litigation firm, announces the filing of a class action lawsuit against the dominated graphics card manufacturer NVIDIA.
The law firm indicated that NVIDIA has violated the §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.
Schall encourages investors who purchased the company shares between August 10, 2017, and November 15, 2018, that suffered losses excess of $100,000 to contact the firm before February 19, 2019.
According to the complaint, NVIDIA has made “false and misleading statements to the market” to materially misleading throughout the class period.
NVIDIA touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary. The Company claimed to be ‘masters at managing our channel, and we understand the channel very well.’ NVIDIA also claimed to the market that any drop off in demand for its GPUs amongst cryptocurrency miners would not negatively impact the Company’s business because of strong demand for GPUs from the gaming market.
Since NVIDIA launched its financial report for Q3 on November 16, many investment banks have lowered their price target on its stock as NVIDIA’s Q3 revenue is only $3.18 billion failed to achieve the $3.24 billion market expectation.
Due to this, Nvidia’s share price once plummeted 18% within one day and its market cap has dropped by more than $23 billion, investors suffered from a great loss.
According to the financial reports launched by NVIDIA, the GPU sales to crypto miners substantially declined. Some analysts commented that NVIDIA’s stock dropping was caused by the crypto market crash that leads to an overall drop in demand, while others believe the company’s market cap drop is largely due to its misjudgment in revenue forecasting.
Moreover, Goldman Sachs analyst Toshiya Hari added that Nvidia’s stock plunged mainly due to its mid-range gaming GPU inventory and a correction in-game console SoCs.