Nvidia crypto mining lawsuit sees silver lining – Stock rises 3.5%
Has Nvidia's surge to a $3.34 trillion market value amid legal challenges altered investor confidence in tech giants?
- Nvidia faced the Supreme Court review for securities fraud.
- Nvidia’s $3.34 trillion market value surpassed Microsoft and Apple.
In a recent turn of events, the U.S. Supreme Court agreed to review Nvidia’s request to dismiss a securities fraud lawsuit, which alleges that Nvidia misled investors about its cryptocurrency-related sales.
Supreme Court takes charge
Following the request, on the 17th of June, the Supreme Court agreed to hear Nvidia’s bid to dismiss this lawsuit.
The court agreed to Nvidia’s request after a lower court revived a proposed class-action lawsuit by California shareholders against Nvidia and CEO Jensen Huang, seeking unspecified damages.
The story so far…
This all started in 2018 when Nvidia’s chips gained popularity for crypto mining due to their capability to perform complex mathematical computations required for mining cryptocurrencies like Bitcoin [BTC].
Plaintiffs accused Nvidia and its top officials of violating the Securities Exchange Act of 1934, alleging that Nvidia’s statements in 2017 and 2018 understated the impact of crypto-related sales on its revenue growth.
Allegedly, Nvidia’s omissions misled investors and analysts about the impact of crypto mining on its business.
Following this, U.S. District Judge Haywood Gilliam Jr. dismissed the lawsuit in 2021, but the 9th U.S. Circuit Court of Appeals in San Francisco revived it with a 2-1 ruling.
According to Reuters, the plaintiffs had adequately claimed that Nvidia’s CEO Jensen Huang made,
“False or misleading statements knowingly or recklessly.”
However, the appellate court found that this to be merely a maneuver to continue the lawsuit. Remarking on which, Nvidia appealed to the Supreme Court, arguing that the 9th Circuit’s decision could lead to,
“Abusive and speculative litigation.”
Nvidia stands strong
Despite the ongoing lawsuit, on the 18th of June, Nvidia’s shares rose by 3.5%, boosting its market value to about $3.34 trillion.
This move has now positioned Nvidia ahead of Microsoft and Apple in the race for the top spot among the world’s most valuable companies.
This remarkable achievement underscores investors’ confidence in Nvidia’s technological prowess despite accusations.
