Shall Law Firm, an American shareholder rights litigation firm, has announced the filing of a class action lawsuit against Nvidia with regards to statements pertaining to the company’s outlook regarding the effect that declining cryptocurrency prices could have on the performance of its shares.
Also Read: Bitcoin Whales and the Rise of Crypto-Fueled OTC Desks in 2018
Firm Files Class Action Against Nvidia
A Los Angeles-based law firm has announced the filing of a class action lawsuit accusing graphics card manufacturer, Nvidia, for “violations of §§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.”
Nvidia is accused of making “false and misleading statements to the market” regarding assertions that a significant decline in demand for graphics processing units (GPUs) would not negatively impact the company’s operations and performance due to high demand from the gaming sector.
Schall Law Firm is currently encouraging investors who purchased Nvidia’s shares between Aug. 10, 2017, and Nov. 15, 2018, to contact the firm before Feb. 19, 2019, especially investors who incurred losses exceeding $100,000.
According to Shall, the GPU manufacturer “touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary” and made “materially misleading” comments throughout the six-month period.
Nvidia Hit Hard by Cryptocurrency Downturn
Nvidia appears to have been significantly hit by the cryptocurrency bear trend, with the company having the worst performing stock in the S&P 500 of the fourth quarter of 2018 with a 54 percent loss in value.
While a number of chip stocks have performed poorly of late – with the PHLX Semiconductor Sector Index, comprised of 30 companies including Nvidia, dropping 19 percent, and Advanced Micro Devices stock losing 45 percent – many have cited declining demand for mining hardware as a catalyst for Nvidia’s notably poor performance.
The recent dumping appears to have been fueled by the reporting of a weaker-than-anticipated quarterly revenue and guidance from Nvidia last month, with the company’s stock falling roughly 19 percent on the trading day following the earnings report.
“The crypto hangover has left the industry with excess inventory – excess channel inventory,” Nvidia’s chief executive officer, Jensen Huang, stated on a conference call at the time.
Do you see merit in the case being brought against Nvidia? Do you agree with Shall that Nvidia made false and misleading statements? Share your thoughts to the comments section below!
Images courtesy of Shutterstock
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