Nvidia Accused Of Misrepresenting More Than $1 Billion In Crypto Mining Biz
In a newly amended lawsuit, documents have shown that investors are accusing Nvidia of not revealing the amount of money they raised by selling graphic cards to various crypto mining firms.
The amended class-action lawsuit against the firm claims that Nvidia violated the Securities Exchange Act for failing to reveal that its gaming revenues relied heavily on the sale of GPUs to crypto miners.
According to the court documents that were filed on May 14, Nvidia knowingly misrepresented financial statements thereby understating by approximately $1 billion in the sale of GPUs to crypto miners between 2017 and 2018.
The court documents show that the sales to the miners represented more than half of the entire firm's total sales revenues.
Nvidia's Legal Storm
Nvidia has been confronted with numerous lawsuits, primarily from investors following the crash of its stock value by 30% after the firm warned that its total revenues would decrease by 7% in 2018.
The amended court documents claim that the company falsified financial statements, misleading consumers and investors that Nvidia's reliance on crypto-related revenues was just small.
The company's investors also accuse the firm of falsely claiming that the sales from the gaming segment were growing quarter after quarter due to strong demand from gamers.
In 2017, the firm's GeForce GPU was highly in demand from the crypto miners, which led to huge profits for the company's gaming segment.
The firm also rolled on a chip targeting the crypto mining industry known as Crypto SKU. However, the sales were entered as from the catch-all businesses unit. Conversely, the Crypto SKU did not catch on as the majority of the miners preferred the GeForce GPUs.
The disgruntled investors state that although there was an increased demand for GeForce units from the crypto miners, Nvidia misrepresented the facts saying that the demand came from the gaming unit.
The recent amended court documents come after Haywood Gilliam, a California-based judge, downsized the case in March. The judge allowed the plaintiffs to amend the court documents.