GPU maker Nvidia is facing several class-action lawsuits from crypto investors who aren’t happy about the company’s massive stock drops.
During the bitcoin boom of 2017, the prices of GPUs went up tenfold as more and more miners aimed to get in on the action. Nvidia – which manufactures GPUs – ultimately claimed that they were “masters at managing” the crypto space and said that any drops in the demand for crypto wouldn’t hurt business.
Crypto Investors Want Their Money Back
Unfortunately, this wasn’t the case. At the time of writing, Nvidia’s stock prices are down roughly 50 percent from where they stood during 2017. Investors have lost barrels of cash and aren’t happy about the end results. Nvidia is now facing several class-action suits from these investors who feel that Nvidia falsely advertised how secure it was and provided misleading information to get new investors involved.
One thing that many investors say Nvidia tried to do was account for its oversupply of bitcoin and cryptocurrency miners by increasing their prices dramatically. Wanting to ensure every miner got his or her wish, Nvidia ordered several extra mining rigs and additional equipment, believing they would be sold without issue to customers. Unfortunately, when the customers didn’t come, Nvidia tried to make up for its overabundant supply of miners by firing their prices up.
The Schall Law Firm – which is representing all investors allegedly wronged by the company – has issued an official statement on the matter and is now searching for investors who may have lost as much as $100,000 or more by putting their money into Nvidia. The statement reads:
The Details of the Suit
“According to the complaint, the company [NVIDIA] made false and misleading statements to the market. NVIDIA touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary. The company claimed to be ‘masters at managing our channel, and we understand the channel very well.’ NVIDIA also claimed to the market that any drop off in demand for its GPUs amongst cryptocurrency miners would not negatively impact the company’s business because of strong demand for GPUs from the gaming market. Based on these facts, the company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about NVIDIA, investors suffered damages.”
In total, Nvidia is facing approximately four separate class-action lawsuits on similar grounds.
Do you believe companies like Nvidia are responsible to their investors under all circumstances? Post your comments below.
Image courtesy of Shuttershock
