Nvidia could be set to face a class-action lawsuit representing investors who claim Team Green mismanaged the demand for graphics cards during the cryptocurrency mining craze. The bubble bursting on crypto mining cause Nvidia’s share value well below half what it was worth just three months ago. This led to investors losing potentially sky-high amounts of capital.
The class-action lawsuit against Nvidia is being prepared by Schall Law, a California-based law firm that has evidently spied a few bucks to be made. Schall Law claims Nvidia made “false and misleading statements to the market”. This concerns Nvidia’s capabilities at both monitoring the cryptocurrency market and being in a position to swiftly pivot depending on the situation. The knock-on effect of the plummeting of crypto demand was an allegedly huge quantity of surplus GPUs that needed to be shifted, all while trying to launch a new generation of graphics cards.
“Based on these facts, the Company’s public statements were false and materially misleading throughout the class period,” writes Schall Law in its class-action lawsuit. “When the market learned the truth about NVIDIA, investors suffered damages.”
They don’t hold fire there either. Schall Law continues: “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. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about NVIDIA, investors suffered damages.”
Schall Law is fishing for investors who’ve lost in excess of $100,000 in an effort to give the lawsuit some traction. Without enough investors signing up there wouldn’t be enough momentum or pressure to get this lawsuit over the line. This is a fairly standard case of a law firm identifying the merest possibility of a hefty payout and attempting to pressurise Nvidia into taking action. We’ll have to wait and see if anything comes of it, although, from the outside looking in, it always seemed obvious that the crypto boom would eventually subside and Nvidia’s share value would drop. That’s all part and parcel of investment, spotting the booms and busts, getting out at the right time.
We’ll be sure to update you if we hear any progress and this class-action lawsuit against Nvidia.