Nvidia under Threat of Class Action Lawsuit over Crypto Market Claims
Chip maker Nvidia is facing a class action suit after its sales plummeted with the collapse of the cryptocurrency market.
California-based chipmaker Nvidia Corporation is facing a class action suit over claims it made in relation to the cryptocurrency market and the impact on its business.
In a statement on Monday, Schall Law Firm called on all investors with losses exceeding $100,000 over alleged violation of the Securities Exchange Act and rules by the U.S. Securities and Exchange Commission (SEC).
The complaint accuses Nvidia of giving the market false and misleading statements.
“NVIDIA touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary,” the shareholder rights litigator said.
Schall Law Firm is also accusing the technology giant of claiming to be “masters at managing our channel, and we understand the channel very well.”
The statement added:
“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.”
Shareholders who bought Nvidia stock between August 10, 2017 and November 15, 2018 should get in touch with the law firm before February 19, 2019 to participate in the class action suit. However, the class is yet to be certified, and until that happens, the shareholders will remain without representation by an attorney, the litigator added.
Nvidia’s financial results plummeted in the third quarter as the collapse of the cryptocurrency market hurt its chip sales and led to an inventory overload. This stood in sharp contrast to its strong gains in 2017, when the company benefited from increased demand for microchips used for PC-based digital currency mining. Nvidia grew its third-quarter revenues by only 2% sequentially to $3.18 billion and 21% compared to the same period of 2017. Investors were not happy with those figures paled in comparison to the 50% quarter-on-quarter growth Nvidia registered at the height of the cryptocurrency boom.