Nvidia Hit With Class Action Lawsuit Over False Statements On Crypto Mining Revenuebr>
National shareholder rights litigation firm Schall Law has filed a class action lawsuit against graphics card maker Nvidia, claiming that Nvidia made “false and misleading statements to the market.”
According to the complaint, Nvidia touted its ability to monitor the crypto market and make rapid changes to its business as necessary. The company reportedly claimed to be masters at managing its channel, and that they understand the channel very well. The company also claimed to the market that any drop off in demand for its GPUs among cryptocurrency miners would not negatively impact the firm’s business because of strong demand for GPUs from the gaming market.
The Schall law firm said that these public statements were false and materially misleading. Investors who purchased the company’s shares between August 10, 2017 and November 15, 2018 reportedly suffered damages due to declining crypto prices, which weakened the demand for Nvidia GPUs.
The complaint against Nvidia alleges violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Parties who put in more than $100,000 are urged to contact the Schall Law Firm in Los Angeles by February 19.
Last month, CNBC reported that Nvidia’s market value grew from $14 billion to over $175 billion between early 2016 and September 2018. However, during the fourth quarter of 2018, investors dumped Nvidia’s stock, cutting the price by 54 percent, making it the worst performer in the S&P 500 over that stretch.
“Investors have found specific reasons to flee Nvidia. One of the catalyst’s for the stock’s prior rally was the company’s connection to cryptocurrencies, particularly bitcoin,” the report said. “With the crash in bitcoin prices this year, there’s been reduced demand for Nvidia’s graphics processing units to mine the currency. In November, Nvidia reported weaker-than-expected quarterly revenue and guidance.”