Nvidia denied the allegations misleading investors about the revenue of cryptocurrency mining
In December 2018, investors filed a lawsuit against Nvidia, an American technology company, about deliberately minimizing the revenue of cryptocurrency mining. However, Nvidia appealed to the US judge, saying the allegation was completely false. Nvidia claims it has cherry-picked information, and analysts predict accurately and clearly on its financials.
Nvidia was sued for not reporting the demand for cryptocurrency mining
Nvidia’s core business is in the gaming sector. However, as the cryptocurrency mining industry became popular, Nvidia evolved through GPU products. In May 2017, Nvidia continued to produce a processor specifically for cryptocurrency mining called the Crypto SKU. Sales of this hardware have been recorded in a typical business segment, away from the gaming segment. However, many cryptocurrency mining companies still prefer to use GeForce gaming chips. Therefore, sales in this segment continue to rise.
However, when the cryptocurrency market showed signs of cooling off, after receiving meager third-quarter revenue results that caused the stock price to drop significantly, investors filed suit against Nvidia. Because, according to them, the company has misled them about the demand for cryptocurrency mining.
However, before this news, Nvidia declared the following:
“Investors only focus on two or three company claims and ignore the others. In the meantime, the company always provides transparent information about our revenue streams. Moreover, they also unable to present evidence regarding the loss. As well as information about people who know about alleged wrongdoing has been released.”
After Nvidia’s announcement, investors still believe that the company’s executives make them feel higher game revenue is separate from the cryptocurrency mining boom because Nvidia has claimed that the majority of crypto-related sales come from SKU Crypto.
And it was not until August 2018 that Nvidia admitted that crypto-related revenue was also tied to the game segment. At this point, it’s clear that the weakening demand for cryptocurrency mining companies is affecting game revenue.
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