NVIDIA declined to disclose information regarding …
NVIDIA refused to disclose information regarding the impact of cryptomining on its business in 2017
GPU maker NVIDIA Corporation on Thursday notified a Delaware court that the investor group did not provide clear reasons why it needed to access internal company information. They could potentially shed light on mismanagement and misinformation about the role of demand for cryptocurrency mining equipment in her business. Writes about this Law360.
An NVIDIA spokesman said that investors have no right to use the data on what its management might have known, but refused to disclose. “We do not think the plaintiffs have fulfilled their mandate,” said NVIDIA attorney Patrick Gibbs..
Under Delaware law, an investor can seek the release of company information if he can prove a proper motive, such as an investigation into a breach. NVIDIA says investors have no good reason to suspect the company of any wrongdoing.
Earlier, a group of investors sued NVIDIA, accusing the company of making “false and misleading public statements about internal controls, prospects and earnings, while simultaneously selling $ 147 million of shares at artificially inflated prices.”.
The company recorded a sharp surge in demand for its hardware in 2017 from cryptocurrency miners. Investors claim that NVIDIA has hidden the true extent of the “cryptocurrency madness” in its business and information about the ability to meet customer demand against this background. As a result, according to them, the gaming segment, traditionally the main source of the company’s income, suffered..
“The management knew that the increased sales due to the demand for cryptocurrencies were not sustainable, because the demand for cryptocurrencies is volatile,” the lawsuit says..
During the decline in the cryptocurrency market, the company’s warehouses were overfilled, and financial goals were lowered. As a result, NVIDIA shares experienced a collapse. Investors now want a wide range of documents to support the company’s statements about its financial prospects.
NVIDIA itself insists that the words of its leadership were taken out of context and it did not hide the impact of cryptocurrencies on its business. “No one can predict the future for sure,” the lawyer said, adding that the company faced “short-term business problems,” but was subsequently able to correct them, which helped stabilize the stock price..
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