NVIDIA Faces Class Action Lawsuit over Losses after Diminished Mining GPU Demand

[Megalith]

The Schall Law Firm has filed a class action lawsuit against NVIDIA for allegedly making false and misleading statements regarding the cryptocurrency market. Investors claim they were essentially tricked by the company, as NVIDIA claimed to be "masters at managing the channel” and was confident “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.” The reality turned out to be a little different.

As Cointelegraph recently reported, after the cryptocurrency mining crash, NVIDIA was the worst reported performer in S&P 500. After a massive sell-off of its shares, the stock price of the company fell by 54 percent. In mid-November, an analysis by Susquehanna -- a United States -based global trading and technology firm -- observed that mining Ethereum (ETH) using graphics processing units was no longer profitable. In the Susquehanna analysis, the profit per month for GPU Ethereum miners hit $0 by Nov. 1, down from nearly $150 in July 2017.

 

[EODetroit]

Hopefully Schall Law Firm gets fucked. These lawsuits never have merit.

 

[Rizen]

 

[piscian18]

Interesting. Itd be one thing if they lied to investors, but it sounds like they're just being sued for over exaggerating their quarterly figures to the market. I didnt even know you could be sued for that.

 

[kandrey89]

LOL, half the investors pulled out over fears and knowledge of cryptocurrency market, while the other stupid half got stuck with devalued shares, now the stupid guys are trying to sue because the other half devalued their stock and they were not told by NVIDIA (which makes chips) that a market which NVIDIA has no control over would change demand for their chips.
It's like an electrician who gets sued for installing lights at a house gets sued by the power company for the owner not using the lights (oh.. and the owner is on vacation for 6 months).

 

[Jim Kim]

insert Grumpy Cat GOOD jpeg here

 

[RealBeast]

Hopefully Schall Law Firm gets fucked. These lawsuits never have merit.

Sadly, having done securities law defense work my guess is that it will settle for attorneys' fees plus almost nothing for consumers -- perhaps a coupon towards a future purchase.

 

[oblox]

Here's a novel idea: Don't buy shares at stupid multiples.

 

[Rizen]

Interesting. Itd be one thing if they lied to investors, but it sounds like they're just being sued for over exaggerating their quarterly figures to the market. I didnt even know you could be sued for that.

You can be sued for almost anything, but whether or not it holds up in court - or is tossed out immediately, for that matter - is a different story.

 

[777]

The past 18 months there were brand enthusiastic individuals on this very forum who insisted crypto was a tiny tiny portion of Nvidia's revenue, profits, and value which meant any crypto collapse would be a nothing burger therefore this firm doesn't have a case.

 

[auntjemima]

The past 18 months there were brand enthusiastic individuals on this very forum who insisted crypto was a tiny tiny portion of Nvidia's revenue, profits, and value which meant any crypto collapse would be a nothing burger therefore this firm doesn't have a case.

Anyone who thought that was an idiot. The market went from guys buying 1 card to play games to everyone buying dozens to farm. It isn't even close to equatable.

 

[oldmanbal]

The thing is Nvidia made false claims that their gaming market wasn't made up of mining sales, which was clearly false. I've commented about this on multiple occasions. You don't magically clap your hands and create 1 billion dollars in demand for pascal cards that were already on the market for over year. There may be merit in this lawsuit.

 

[Dead Parrot]

As long as Nvidia included the standard boilerplate stuff about "forward looking statements", don't see how this suit gets very far.

 

[sfsuphysics]

Lets sue the company because they said something, that as it turned out didn't end up coming true, god damnit they're a publicly traded company they are supposed to accurate predict the future!

 

[Grimlaking]

If it were normal stuff then yes. But if you expect me to believe that Nvidia honestly and truly didn't think their video card sales were highly inflated due to mining demand.... they have to be smoking crack.

SO either...
1. They knew mining was inflating sales to a great degree and chose to LIE saying otherwise meaning they are liable.

or..

2. They didn't think mining was impacting sales because miners don't need video output so only the cards sold with video output were for gamers. So Nvidia is stupid.

I don't see a middle ground here. And as Nvidia I would RATHER have lied than people thing I'm stupid.

But this case will settle out of court and never see the light of day.

 

[Lakados]

nVidia doesn’t track how it’s cards are used unless somebody chooses to share that with them. nVidia makes drivers & hardware and is only really responsible for the Founders Esition cards. Anything outside those is on 3’rd party manufacturers, this is probably further fall out from that Gigabyte shipment.

 

[kinjo]

Right because investment shouldn't carry risk... I love how all the upper class believe they should be immune to market forces (suing for stock losses/companies under performing banks getting bailouts etc.), but when market forces affect the people at the bottom (Mass layoffs, plant closures, inflation in the price of common goods, wage stagnation etc.) they are perfectly OK and just say suck it up that's capitalism peasants. The same fucks that hate any sort of social safety net are always the first to run crying to the government when hard times effect them. Hope the firm pushing this suit loses and they go bankrupt and they and their children have to go live under a bridge.

 

[Probleminfected]

Mining is dead, long live asic and fpga.

 

[gamerk2]

Anyone who thought that was an idiot. The market went from guys buying 1 card to play games to everyone buying dozens to farm. It isn't even close to equatable.

Yep, just like many of us called the crypto collapse. It was a classic bubble.

Now, I don't think NVIDIA shares deserved to drop 50%; that's classic investor over-reaction.

 

[Probleminfected]

Can't wait till the next crypto bubble when we can all look back and go, man I should have bought then.

I really don't care what it is, if I can make money off of it, thats all that matters.

 

[HAL_404]

we live in the age of litigations where people will sue you if you look at them the wrong way (for them there is no right way). Last time I read about this being a Societies norm was Rome - just before it collapsed from the inside out.

 

[HockeyJon]

Some trial lawyer trying to make money on some BS? Hmmm, must be a normal Tuesday...

 

[Qthulu]

They are Sueing because they believe nvidia execs knew it was coming but told investors something else. If they did they can get in some serious hot water.

 

[Joust]

Sadly, having done securities law defense work my guess is that it will settle for attorneys' fees plus almost nothing for consumers -- perhaps a coupon towards a future purchase.

...Rule 11 sanctions and GTFO of here with that crap.

 

[TorxT3D]

greed vs greed.
cry me a river

 

[Zuul]

Who the fuck cares, give me marketing

 

[Pieter3dnow]

I don't like this either I mean how many lawsuits happen in America tech related?

 

[IndyColtsFan]

Right because investment shouldn't carry risk... I love how all the upper class believe they should be immune to market forces (suing for stock losses/companies under performing banks getting bailouts etc.), but when market forces affect the people at the bottom (Mass layoffs, plant closures, inflation in the price of common goods, wage stagnation etc.) they are perfectly OK and just say suck it up that's capitalism peasants. The same fucks that hate any sort of social safety net are always the first to run crying to the government when hard times effect them. Hope the firm pushing this suit loses and they go bankrupt and they and their children have to go live under a bridge.

I get what you're saying, but remember, oftentimes "peasants" (as you call them) have 401ks with managed funds, some of which will contain nVidia stock. I believe one of my tech funds has nVidia in it, for example. Now, I don't know your definition of "upper class" and maybe you would consider me one, but I don't have yachts, multiple houses, or $100k+ sports cars sitting around, so I consider myself upper middle class. So, middle class folks are impacted by the speculators and Jensen's buffoonery as well.

I was thinking back to the peak of the cryptocurrency BS and thought our pal Jensen made statements to the effect of: 1) Crypto sales are a small percentage of our video card sales. 2) We won't increase output of cards to meet demands since crypto sales might dry up. To me, those statements are a little contradictory but I fully believe that Jensen knew #1 was completely false because he had no real way of knowing and the sudden sale of every single card they made was a big clue he was wrong. As far as #2 goes, I have no proof but I have a gut feeling that nVidia did, in fact, ramp up production. I mean they appear to have massive inventory of new Pascal cards. Of course, I could be wrong and maybe they didn't increase output but didn't fully appreciate what the used market would do to demand for their cards. That's obviously why they priced the 20xx cards so ridiculously, hoping it would force folks to buy their Pascal inventory.

Is the lawsuit justified? I don't really know or care, but I certainly won't shed a tear for Jensen or the big individual investors who got soaked.

 

[IndyColtsFan]

Sadly, having done securities law defense work my guess is that it will settle for attorneys' fees plus almost nothing for consumers -- perhaps a coupon towards a future purchase.

Yep, a coupon which must be used within like 30 days of the settlement date too, so few will use it.

 

[Archaea]

Thing is, looking back six months, Intel and AMD suffered similar 50% falls. So good luck with the claim, when market peers suffered the same.

Second thing is, Nvidia isn’t even close to the bottom, and yes they did lie on their quarterly publications saying Crypto was only ~ 8% of their sales. I predict $30 per share within a year based on both the tech markets correcting and their lying PR that’s now exposed as false.

 

[piscian18]

After all this shitstorm around nvidia my theories are - 30 days til $600 RTX 2080 $999 RTX 2080ti and at some point in the near future like 1st/2nd quarter we get a v2 of the RTX 2080ti reference board and it'll possibly be whats prompts more price drops. God knows what they'll charge for it.

 

[lostin3d]

near future like 1st/2nd quarter we get a v2 of the RTX 2080ti reference board and it'll possibly be whats prompts more price drops. God knows what they'll charge for it.

I'm thinking Q3 w/ HDMI 2.1, maybe PCIe 4.0, maybe some kind of Vram change.

 

[Rizen]

I'm thinking Q3 w/ HDMI 2.1, maybe PCIe 4.0, maybe some kind of Vram change.

That stuff has to be baked into the silicon so that's unlikely.

 

[Shoganai]

This probably won’t hold up, but I’m still enjoying the NVIDIA sh^tstorm regardless.

 

[funkydmunky]

insert Grumpy Cat GOOD jpeg here

Humor gone if you can't overcome lazy!

 

[Exavior]

Anyone who thought that was an idiot. The market went from guys buying 1 card to play games to everyone buying dozens to farm. It isn't even close to equatable.

but i thought that zero gamers have been able to buy video cards for the past 3+ years because of miners buying 100% of them and NVidia blocked gamers from buying cards. Shouldn't you guys have made up that difference buying all the cards that you were never allowed to buy for the past few years?

 

[YeuEmMaiMai]

people are stupid and then turn around and sue others for them being stupid? Sweet.

 

[Verge]

LOL, half the investors pulled out over fears and knowledge of cryptocurrency market, while the other stupid half got stuck with devalued shares, now the stupid guys are trying to sue because the other half devalued their stock and they were not told by NVIDIA (which makes chips) that a market which NVIDIA has no control over would change demand for their chips.
It's like an electrician who gets sued for installing lights at a house gets sued by the power company for the owner not using the lights (oh.. and the owner is on vacation for 6 months).

That is not accurate.

 

[RPGWiZaRD]

What da.... how the hell can you sue for something in like, only in 'murica stamp all over this one.

As much as I dislike Nvidia's practices I still hope the retarded lawsuit doesn't go through.

 

[Patton187]

Here's a novel idea: Don't buy shares at stupid multiples.

Define a stupid multiple and I am there.