US Supreme Court to hear Nvidia bid to scuttle shareholder lawsuit
What are the alleged consequences of Nvidia's purported omissions on its revenue sources, according to the plaintiffs?
According to the plaintiffs, Nvidia's alleged omissions regarding the role of cryptocurrency mining in its revenue growth misled investors and analysts who were interested in understanding the impact of cryptomining on Nvidia's business3. The plaintiffs claim that Nvidia made false or misleading statements in 2017 and 2018, downplaying the extent to which its revenue growth was driven by crypto-related purchases3. As a result, investors were given the impression that the company's growth was more reliable and less dependent on the volatile cryptocurrency market than it actually was.
What specific accusations are being made against Nvidia and its CEO Jensen Huang in the shareholder lawsuit?
The shareholder lawsuit accuses Nvidia and its CEO Jensen Huang of violating the U.S. Securities Exchange Act of 1934 by making statements in 2017 and 2018 that falsely downplayed how much of Nvidia's revenue growth came from crypto-related purchases. The plaintiffs claim that these omissions misled investors and analysts who were interested in understanding the impact of cryptomining on Nvidia's business. The lawsuit seeks unspecified monetary damages.
What was the basis for the 9th U.S. Circuit Court of Appeals' decision to revive the lawsuit against Nvidia?
The 9th U.S. Circuit Court of Appeals revived the lawsuit against Nvidia based on the plaintiffs' allegations that the company's CEO, Jensen Huang, made "false or misleading statements" regarding the impact of cryptocurrency sales on Nvidia's revenue growth. The plaintiffs claimed that Nvidia violated the Securities Exchange Act of 1934 by not disclosing the true extent of crypto-related purchases on their revenue growth, which misled investors and analysts interested in understanding the impact of cryptomining on Nvidia's business. The 9th Circuit Court found that the plaintiffs had adequately alleged that Huang made these statements knowingly or recklessly, allowing their case to proceed.