An amended class action complaint filed against Nvidia Corp has accused the firm of violating the Securities Exchange Act by downplaying the extent to which its gaming revenues relied on GPU sales to cryptocurrency miners. The complaint, filed May 14, claims that Nvidia issued deliberately misleading statements that understated more than $1 billion in GPU sales relating to crypto miners during 2017 and 2018. Claims estimate that sales to miners represented over half of the company’s total sales. Nvidia was hit with a spate of lawsuits from investors after its stock price crashed nearly 30% after announcing that revenues would fall 7% during late 2018.
Nvidia accused of misrepresenting $1b in sales
The amended complaint asserts that the firm deceived “the market into believing that Nvidia’s dependence on cryptocurrency-related revenues was small” while falsely claiming “quarter after quarter, that the gaming segment’s sales growth resulted from strong organic demand from gamers.” The filing cites a study that estimated Nvidia’s misrepresentations obscured $1.126 billion in sales to miners, however, notes that a separate report by RBC Capital Markets concluded $1.35 billion in sales had been obfuscated by the firm.