The US Supreme Court will review a case involving Nvidia’s crypto mining revenue, potentially shaping shareholder lawsuits.
Nvidia’s Alleged Misleading Statements
Shareholders claim that Nvidia’s CEO, Jensen Huang, concealed the significant role of crypto mining in the company’s revenue growth in 2017-2018. They argue that Nvidia downplayed the dependence on mining sales, exposing the company to greater risk than disclosed.
The Market Downturn and Shareholder Lawsuit
In November 2018, Nvidia announced a revenue shortfall, leading to a sharp decline in its stock price. Shareholders contend that Nvidia’s prior statements did not adequately reflect the true extent of crypto mining demand.
Nvidia’s Appeal to the Supreme Court
Nvidia appealed the lower court’s decision, arguing that the shareholders’ lawsuit lacked sufficient evidence to support their claims. The company asserts that no internal documents exist to prove that executives made misleading statements.
Potential Impact on Shareholder Litigation
If the Supreme Court sides with Nvidia, it could make it easier for companies to dismiss shareholder lawsuits early on. This would reduce the costs and risks associated with such litigation.
Current State of the Crypto Market
As of writing, the crypto market has declined from its March peak. Despite expectations of catalysts to revive the upward trend, major cryptocurrencies remain range-bound.
