NVIDIA slapped with class action lawsuit over crypto crash.

[dtaflorida]

I agree this is all stupid, but I still love that they're being taken to task for

 

Quote

The Company claimed to be "masters at managing our channel, and we understand the channel very well."

 

And then RTX cards proceeded to not sell well, and they had excess inventory... 

[peanuts104]

19 hours ago, poochyena said:

My 10 nvda shares currently sitting at -22%. Can I get a payout too?

 

I totally get the lawsuit though. Nvidia bet BIG on crypto and ensured everyone that it is sticking around and will help the company. AMD actually understood that the cryto surge was just a bubble and told investors not to look to much into gpu sales due to crypto.

It was also a situation where financially Nvidia has deep enough pockets to bet big and AMD couldn't afford the risk.  If AMD had bet big on crypto and lost, that might have done the company in.

[Brooksie359]

16 hours ago, Lathlaer said:

Exactly.

 

This isn't about people who invested in crypto, it's about people who invested in NVIDIA stock which went down due to high inventory.

 

Basically they are blaming NVIDIA for making too many GPU's.

They had said it wouldn't  matter because gaming demand would eat up the remaining stock which it did. Did they have high inventory at one point? Yes but that changed relatively quickly. 

[Brooksie359]

14 hours ago, Delicieuxz said:

 

This doesn't address the point I made.

 

If Nvidia's stock price fell in-line with the market, then its lost value would be roughly comparable to an average percentage of stock-value loss in the market. But, Nvidia's stock-value loss exceeds that of all the rest of the market, which is what makes it not in-line with the rest of the market.

 

Nvidia’s 54 percent plunge this quarter makes it the biggest loser in S&P 500

 

Also, Nvidia's losses didn't just start happening in December, or November. Nvidia's stock started plunging October 3rd.

 

Chipmaker Nvidia plunges after missing on revenue and guidance

 

The stock market took a tumble in December. But Nvidia's took a worse tumble during that time than all other stocks because Nvidia's were already tumbling for reasons particular to Nvidia's business before the stock market tumbled as a whole.

 

Articles have been attributing the loss in value of Nvidia's stock to the crash in crypto-mining for a while, which probably is what motivated the lawsuit against Nvidia to allege that Nvidia misled investors by any claims that changes in crypto-mining wouldn't impact overall demand for GPUs.

October makes it sound like it's the result of the 2000 series gpus was the cause not the mining bubble bursting. 

[mr moose]

So a bush fire wipes out a forest,  According to some people here, some of the trees just burnt independently of the rest of the forest.

 

10 hours ago, hobobobo said:

Nah, mining craze is just a part of it, nvidia fell greater then the market coz they overextended, they admitted as much in the last conference call. Never claimed it had nothing to do with the slide, but its not just the slide, nvidia is included in Nasdaq general and nasdaq 100, which drags it with the markets, but at the same time offers some stability. The fact that they managed to go 30pp lower then the market while being directly tied to it is the miracle people are talking about.

I honestly have no clue how this would go through court and what can be argued, ppl are just butthurt nvidia fell futher then the general market.

 

Ps. Wanna see something that fell with the market - look at IBM. They lost 20% purely on the slide, there are no serious internal factors to justify it

 

 

Can you show me where they over extended.  As I already pointed out there revenue expectation from mining was only 98M short in a  $2.6B field. They do not have over stock problems because anything that can be shipped out of the system in a month or two is not a problem, the first claims of inventory issues was july and their stocks didn't start to fall until Oct (2 weeks after the Nasdaq started to fall).   Nvidia slid 48% while the market total was 20%.  This does not mean Nvidia was pushed lower by mining or inventory or some other specific issue, it just means they were out the farthest with the value.  And why wouldn't they be,  look at how high their stock grew in the 3 months prior.  Had that not happened their stock price would not have gone up meaning their fall would have been closer to the others. The issue here is that people are claiming nvidia was caught out by the mining burst,  but there is no evidence to points to that while there is considerable evidence that points to normal market changes in the event of an entire market slide.

 

5 hours ago, dtaflorida said:

I agree this is all stupid, but I still love that they're being taken to task for

 

 

And then RTX cards proceeded to not sell well, and they had excess inventory... 

 

Nvidia stock did not slide in July when that first was reported because they really don't have a stock problem.  And RTX are selling really well, they sold out on pre-orders.  https://segmentnext.com/2018/09/26/nvidia-rtx-2080-graphics-cards/

3 hours ago, Brooksie359 said:

October makes it sound like it's the result of the 2000 series gpus was the cause not the mining bubble bursting. 

That's becasue it was neither the 2000 series nor mining nor stock, Nvidia had a higher value prior to the market falling so when they fell they fell further.

 

 

[dtaflorida]

9 minutes ago, mr moose said:

Nvidia stock did not slide in July when that first was reported because they really don't have a stock problem.  And RTX are selling really well, they sold out on pre-orders.  https://segmentnext.com/2018/09/26/nvidia-rtx-2080-graphics-cards/

I'm just sayin, they make big audacious claims, and I'm not gonna complain if stupid ppl choose to make an argument with them over it. Would we be discussing a stupid suit over rich ppl loosing a bet if they'd won the bet and NVIDIA made their sales projections and the stocks still crashed with the rest of the market?

[mr moose]

13 minutes ago, dtaflorida said:

I'm just sayin, they make big audacious claims, and I'm not gonna complain if stupid ppl choose to make an argument with them over it. Would we be discussing a stupid suit over rich ppl loosing a bet if they'd won the bet and NVIDIA made their sales projections and the stocks still crashed with the rest of the market?

To be clear, I am saying the lawsuit (in my opinion) will fall flat because Nvidia have been true to their word.  I don't care if the investors are rich or poor, stocks can be a gamble and suing because you lost is BS.  If Nvidia had of made growth/revenue predictions based on product claims then they would have an argument, but that didn't happen.

[Delicieuxz]

On another forum, someone has pointed out another part of the lawsuit's argument:

https://www.overclock.net/forum/225-hardware-news/1717020-th-nvidia-targeted-class-action-lawsuit-over-crypto-crash.html#post27785008

 

 

Here's the court document: http://securities.stanford.edu/filings-documents/1068/NC00_03/20181221_f01c_18CV07669.pdf

 

From the lawsuit document:

Quote

 

3. Throughout the Class Period, Defendants assured investors that the Company followed the market closely and could adjust to rapid changes in the cryptocurrency markets. Even as analysts increasingly began to question the Company’s ability to manage inventory in the face of an uncertain cryptocurrency market, Defendants touted that NVIDIA and its executives are “masters at managing our channel, and we understand the channel very well.” NVIDIA also repeatedly assured investors that sales to cryptocurrency-related customers made up a small portion of the Company’s revenues, and that strong demand for GPUs by NVIDIA’s core customer base of computer gamers would compensate for any decline in demand from cryptocurrency users.

 

4. These representations had their intended effect, as analysts upgraded the Company’s stock and NVIDIA shares traded at record highs. At the same time, NVIDIA senior executives began selling significant amounts of their personally held shares. For example, CEO Huang sold 110,000 of his personally-held NVIDIA shares during the Class Period, reaping over $18 million in proceeds.

 

 

Part of the lawsuit alleges that Nvidia said one thing to their investors, while Nvidia company execs' actions demonstrated a different belief held by the company.

 

A claim that the gaming market would compensate for loss of GPU demand by miners has not proven to be accurate. Nor do I think anyone would have thought it a reasonable claim to make during peak crypto-mining craze, as on tech forums everyone was blaming mining for the lack of inventory and the sky-high prices. And when mining died down, inventory became piled up, which Jen Huang mentioned himself. So, clearly, the gaming market did not compensate for crypto-mining sales.

 

I guess the validity of the case might come down to whether Nvidia did in-fact make bold claims that gaming GPU demand would be that strong.

[Sfekke]

I invested wrong, what do I do?

"Sue whoever I can!"

[Sauron]

On 1/2/2019 at 11:04 PM, wONKEyeYEs said:

I just hope that NVIDIA doesn't get mortally wounded as a result.

A monopoly doesn't serve the consumer.

As if we were at any risk of AMD becoming a monopolist... nvidia is too big to die like this, and it isn't really going to change their marketshare because investors aren't the ones buying cards.

[mr moose]

1 hour ago, Delicieuxz said:

On another forum, someone has pointed out another part of the lawsuit's argument:

https://www.overclock.net/forum/225-hardware-news/1717020-th-nvidia-targeted-class-action-lawsuit-over-crypto-crash.html#post27785008

 

 

Here's the court document: http://securities.stanford.edu/filings-documents/1068/NC00_03/20181221_f01c_18CV07669.pdf

 

From the lawsuit document:

 

Part of the lawsuit alleges that Nvidia said one thing to their investors, while Nvidia company execs' actions demonstrated a different belief held by the company.

 

A claim that the gaming market would compensate for loss of GPU demand by miners has not proven to be accurate. Nor do I think anyone would have thought it a reasonable claim to make during peak crypto-mining craze, as on tech forums everyone was blaming mining for the lack of inventory and the sky-high prices. And when mining died down, inventory became piled up, which Jen Huang mentioned himself. So, clearly, the gaming market did not compensate for crypto-mining sales.

 

I guess the validity of the case might come down to whether Nvidia did in-fact make bold claims that gaming GPU demand would be that strong.

What proof?  Nvidia were down only $82M than accounted for, that's it, they essentially lost $82M out of a GPU revenue pool of $2.6B because of their mining expectations.

 

Quote

“Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million. Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”

 

 

That was back in August, 

 

They have done exactly what they said they were doing.  They have mitigated mining loses and the size of the GPU market (being $2.6B) is large enough to compensate any effects of mining revenue.  

 

https://www.coindesk.com/nvidia-substantial-decline-in-gpu-sales-from-crypto-miners

 

 

[porina]

2 hours ago, Delicieuxz said:

Part of the lawsuit alleges that Nvidia said one thing to their investors, while Nvidia company execs' actions demonstrated a different belief held by the company.

If we assume that claim is true, that would be insider dealing wouldn't it? A very serious charge. I haven't looked to see if any of nvidia's senior management made unusually large sales at the time, but they are people too and need cash in hand. You can't go to a shop and buy stuff with shares.

 

I was going to dig further but haven't had time. I did briefly look at some of the financial documents that they have to issue to investors. I saw nothing unexpected in those, they are full of disclaimers that the future might not turn out how they see it. I think it a fair question, just how big an impact the specific claims of misrepresentation are in the grand scheme of the company. No company is going to predict the future 100% accurately in these types of statement. It would be a difficult task to prove that any statements were given out in bad faith.

[mr moose]

3 minutes ago, porina said:

If we assume that claim is true, that would be insider dealing wouldn't it? A very serious charge. I haven't looked to see if any of nvidia's senior management made unusually large sales at the time, but they are people too and need cash in hand. You can't go to a shop and buy stuff with shares.

 

I was going to dig further but haven't had time. I did briefly look at some of the financial documents that they have to issue to investors. I saw nothing unexpected in those, they are full of disclaimers that the future might not turn out how they see it. I think it a fair question, just how big an impact the specific claims of misrepresentation are in the grand scheme of the company. No company is going to predict the future 100% accurately in these types of statement. It would be a difficult task to prove that any statements were given out in bad faith.

 

 

Also we can look at total GPU shipments as market share and see that Nvidia has lost 3% since this time last year.

https://www.statista.com/statistics/754557/worldwide-gpu-shipments-market-share-by-vendor/

 

If a company expects no revenue from mining and still only loses 3% market share, I'd say they are managing stock quite well.  The chief accusation is they are not managing it as well as they claimed they would.

 

 

 

 

[-rascal-]

Schall Law Firm is a fu$king joke.

Just searching their name up on Google comes back with a BUNCH of class action lawsuits from them ...within the last month.

 

 

INVESTOR ACTION NOTICE: The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against Immunomedics, Inc. and Encourages Investors with Losses in Excess of $100,000 to Contact the Firm

https://globenewswire.com/news-release/2019/01/04/1680758/0/en/INVESTOR-ACTION-NOTICE-The-Schall-Law-Firm-Announces-the-Filing-of-a-Class-Action-Lawsuit-Against-Immunomedics-Inc-and-Encourages-Investors-with-Losses-in-Excess-of-100-000-to-Cont.html

 

IMPORTANT INVESTOR REMINDER: The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against Alkermes plc and Encourages Investors with Losses in Excess of $100,000 to Contact the Firm

https://www.businesswire.com/news/home/20190104005437/en/IMPORTANT-INVESTOR-REMINDER-Schall-Law-Firm-Announces

 

EARLY JANUARY DEADLINE ALERT: The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against Apogee Enterprises, Inc. and Encourages Investors with Losses in Excess of $100,000 to Contact the Firm

https://forextv.com/top-news/early-january-deadline-alert-the-schall-law-firm-announces-the-filing-of-a-class-action-lawsuit-against-apogee-enterprises-inc-and-encourages-investors-with-losses-in-excess-of-100000-to-contact/

 

SHAREHOLDER ACTION NOTICE: The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against The Boeing Company and Encourages Investors with Losses in Excess of $100,000 to Contact the Firm

https://www.marketwatch.com/press-release/shareholder-action-notice-the-schall-law-firm-announces-the-filing-of-a-class-action-lawsuit-against-the-boeing-company-and-encourages-investors-with-losses-in-excess-of-100000-to-contact-the-firm-2018-12-17

[Stormseeker9]

Time to buy Nvidia shares Q4 ‘19 - Q2 ‘20

[williamcll]

I thought cryptocurrencies have no protection.