The major Graphics processing unit (GPU) producerNvidia faces a lawsuit because of losses made after falling crypto prices. Thecompany reported losses due to the falling demand for GPUs.
Nvidia – falling with the crypto prices
Over nine months ago, Nvidia’s CEO Jensen Huang said that blockchain is here to stay. He argued that technology is revolutionary and that they saw an increasing demand for GPUs. However, the demand for GPUs diminished after the demolition of cryptocurrency prices during 2018. During Nvidia’s earnings report for Q3, the company revealed that the demand for their GPUs had dried up. Their stock price took a big hit and fell 17 per cent. However, Huang stated that their position is stronger than ever:
“Our near-termresults reflect excess channel inventory post the cryptocurrency-boom, which will be corrected. Our market positionand growth opportunities are stronger than ever.”
Even so,he admitted that the cryptocurrency winter lasted longer than they thought itwould.
“Thecrypto hangover lasted longer than we expected. We thought we had done a betterjob managing the cryptocurrency dynamics.”
Nvidia faces a lawsuit
Thehangover is still in play, and Nvidia’s share price has taken a serious hit. The share price isdown over 50 per cent since the beginning of 2018. Now, they also face alawsuit for misleading its investors, Schall law firm announced the lawsuit on Dec. 24.
Tocomplaint states that “the Company made false and misleading statements to themarket. NVIDIA touted its ability to monitor the cryptocurrency market and makerapid changes to its business as necessary. The Company claimed to be “mastersat managing our channel, and we understand the channel very well.”
Accordingto Schall, Nvidia also stated that they claimed to the market that any drop offin demand for its GPUs amongst cryptocurrency miners would not negativelyimpact the Company’s business because of strong demand for GPUs from the gamingmarket.
Based onthose facts, the facts presented by Nvidia was misleading. When the marketlearned the truth about the company, investors suffered damage. Schall now encourages investors to join the case torecover their losses.
According to a recent article, covered by Toshi Times, miners are suffering from the falling crypto price as well as the major companies. Many miners had to close down their business because the cost of running the rigs was greater than the profits. The “shutdown price” is reached according to the major mining pool 8BTC.
Image Source: “Pixabay”
Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.