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NVIDIA Slapped With Class Action Lawsuit Tied To Cryptocurrency Implosion (hothardware.com)

Posted by EditorDavid on from the magic-internet-money-lawsuits dept.

Long-time Slashdot reader foxalopex writes: It looks like Nvidia is going to be hit with a class action for investors who lost big when their stock price crashed more than 50% due to an overstock of GPU cards that were produced for the crypto-currency craze back in 2018. The suit claims investors were told Nvidia had control of the situation until it crashed worse than even Nvidia had anticipated.
"The Company's public statements were false and materially misleading," argues the complaint from a Los Angeles law firm, seeking investors who purchased shares in NVIDIA between August 10, 2017 and November 15, 2018.

It was on November 15 that NVIDIA issued a statement that "excess channel inventory post the crypto-currency boom...will be corrected." Citing new products for machine learning, film rendering, and cloud computing, they added that "Our market position and growth opportunities are stronger than ever."

20 of 171 comments (clear)

  1. Well, there's a bit of truth... by ddtmm · · Score: 2

    I will agree with the last part. If the stock price crashes 50%, then "Our market position and growth opportunities are stronger than ever" makes sense. Time to buy...

    1. Re:Well, there's a bit of truth... by v1 · · Score: 5, Interesting

      Investors that have blind faith in company forecasts are getting what they deserve. They are legally obligated to report past and current, but they will always dream of an amazing future. Do your homework before buying stock.

      "But they LIED to us when they said they expected things would improve!!" No, optimism is not lying. Thank you for your money, now go home.

      --
      I work for the Department of Redundancy Department.
    2. Re:Well, there's a bit of truth... by es330td · · Score: 4, Interesting

      Thank you for your money, now go home.

      NVIDIA didn't even get the money. These shares were purchased on the secondary market.

    3. Re:Well, there's a bit of truth... by ShanghaiBill · · Score: 2

      No, optimism is not lying.

      They didn't just express "optimism". They stated as fact that the overstock "will be corrected", when in fact they had no plan to fix the problem.

      When you are a public company, you can't just go out and make false or misleading official statements.

      They didn't have to make a statement about the overstock, but when they did make a statement, then they had a fiduciary duty to be scrupulously honest with their investors, and they didn't do that. They should have followed my grandmother's advice: "If you have nothing good to say, then STFU."

  2. "back in 2018" by jgaynor · · Score: 5, Funny

    IT WAS SIX DAYS AGO

    1. Re:"back in 2018" by tsqr · · Score: 2

      IT WAS SIX DAYS AGO

      Wrong, it wasn't even 5 days ago. More like 4 days + 15 hours ago in the US. Hint: There is no January 0.

      Six days ago it was most definitely 2018. So maybe not wrong at all. If he'd said, "2018 ended six days ago," he'd have been wrong.

  3. This should be illegal by reanjr · · Score: 4, Insightful

    Either vote in a new board or sell your stock. Suing your partners to make up for your own ignorant investments makes you the most worthless kind of human being.

    1. Re:This should be illegal by BeerCat · · Score: 4, Insightful

      Time was when the small print was "the value of your investment can go down as well as up"

      Looks as though these folk never read that part, and now want to blame someone else

      --
      "She's furniture with a pulse"
  4. So... by argStyopa · · Score: 4, Insightful

    ...If crypto currency has crashed and there's a glut of these top end gpus, such that their stock crashed and a class action suit is rolling....where can I get that crazy cheap GPU? I can certainly use one, and there should be rivers of them for sale cheap, no?

    --
    -Styopa
    1. Re:So... by Sir+Holo · · Score: 2

      And yet a new Nvidia GTX 1080 Ti still costs double what it cost in November, 2017. I thought excess stock led to price drops.

    2. Re:So... by omnichad · · Score: 2

      Maybe they're learning from Apple. If so, they'll sell the same model for 5 years with no price drops and when the new model comes out the old one comes off the market entirely.

    3. Re:So... by Fly+Swatter · · Score: 2

      I was reading up on this lately, the problem currently and in the recent year was the price of DRAM skyrocketing. Once again we can blame the DRAM manufacturers. Oh BTW, they are finally ramping up for more production of memory chips used in these GPU applications, any day now...

    4. Re:So... by mapkinase · · Score: 4, Interesting

      100 or so years ago one of the first economic crises of overproduction characterized as such hit Europe.

      Instead of selling their farm stock cheap farmers chose to destroy their products. Giving stuff away costs distribution money, destroying them costs less.

      --
      I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
    5. Re:So... by Highdude702 · · Score: 2

      Actually most miners, with the exception of morons with too much money to begin with... Keep the cards rather cool. A lot cooler than you would have gaming in a pc case. None of my GPU's ever went above 65c, I know a few large mining ops that had warehouses full. and they stayed at around 50-60c because of the enviornment they were in. Typical gaming load in a consumer case is going to see gpu temps of 85c+ unless you have a very very well ventilated case with tons of fans and decent room temp. Also mining only uses a small fraction of the actual GPU core, as the other parts aren't needed for the math the algorithm uses. And large operations normally don't overclock the cards at all because it tends to cause issues with nonce's.

    6. Re:So... by alvinrod · · Score: 2

      The issue is that the replacement cards that NVidia is offering in the 2000 series had the prices massively jacked up. Part of this is because they include some new technology to enable ray-tracing, but the real world performance of that technology hasn't been very good, so if you're just running games the same as always, the new cards don't offer much (if any) improvement. However, the performance level of where the 1080 Ti was at went up in cost, so the 1080 Ti has been dragged up with it.

      Additionally, NVidia didn't overproduce the 1080 Ti, only the 1060 (which has seen considerable price drops) so there isn't an excessive amount of stock left over. Finally, AMD doesn't have anything that's really capable of competing with the 1080 Ti, so NVidia can get away with charging whatever the market will bear since they have no real competition to keep prices in check. Hopefully AMD will announce some new cards at CES and force NVidia to bring down their prices.

    7. Re:So... by thegarbz · · Score: 3, Interesting

      100 or so years ago one of the first economic crises of overproduction characterized as such hit Europe.

      Instead of selling their farm stock cheap farmers chose to destroy their products. Giving stuff away costs distribution money, destroying them costs less.

      This is interesting but not the problem here. The thing here is that there is no oversupply of GPU cards. There is only an oversupply of GPUs in the upper end of the supply chain. The mining crash and the desire not to further drop prices on already purchased units by OEMs mean that these aren't being sold. The retail market is sitting quite happily at the RRP and there's no incentive for them to drop.

      Farming equivalence: An oversupply of wheat does not mean that there are mountains of bread laying around being sold for bargain prices.

    8. Re:So... by hairyfeet · · Score: 2

      Nope, actually just the opposite. When you game with a GPU you are having a LOT of thermal cycling, card gets really hot during intense gameplay, card cools down when you aren't playing, and that wears them out.

      With the miners though you do NOT want a bunch of cycling as that sucks power so what they would often do is undervolt the card to cut down on power usage (thus maximizing profits) and would keep them at a constant load and thus at the same temp which doesn't wear them out like a lot of cycling does.

      Now that the market has gone bust you can find a ton of R9380x and RX480s for quite cheap, been grabbing the 380x cards for like $60 a pop, and the miner cards have been absolutely immaculate and not had the slightest bit of issue with them thanks to how well they babied the cards. Remember mining is all about maximizing profit and just slamming the cards full bore like you would if you were plowing through a game with the settings maxed out? Cost too much electricity to make that a smart move for generating profit from those cards.

      --
      ACs don't waste your time replying, your posts are never seen by me.
  5. Investors think profits are guaranteed by electroblood · · Score: 5, Insightful

    I work on Wall Street and all of the investors think they are entitled to profits, and that they are guaranteed growth every quarter. The public companies have played into that doing whatever it takes to get their stock to look attractive, and NVIDIA plays this game as ruthlessly as anyone. This is a situation of their own making. The market as a whole is morally bankrupt and needs to be brought under control.

  6. Re:This pisses me off by Mashiki · · Score: 2

    NVIDIA was crystal clear that they knew it was temporary and had measures in place to ensure a continuity of sales and not oversupply the channel.
    Except they didn't.

    Exactly this. It's not hard to find the news articles on exchange sites, or hell even forex oriented news sites with nvidia pumping that they had 'contingency' plans if the market fell out, and all that. Now they have assloads of cards that are already depreciated and are getting worse, and they haven't managed to catch up to the latest tick-tock cycle leading to their fabbing being way-way-way behind along with a manufacturing shortage of available PCB space. Their solution to self-created card shortages? Raise prices.

    Good times to be AMD I guess.

    --
    Om, nomnomnom...
  7. Re:This pisses me off by cm5oom · · Score: 3, Funny

    Your post helped me to understand why more and more people are starting to ignore some of the more arcane grammar rules. It's because they don't actually clarify things they are simply rules for the sake of rules. Thanks for that at least. This is a serious post, not trolling.