Nvidia (NVDA) Targeted With Class Action Lawsuits Over Crypto Crash

269
Nvidia (NVDA) Targeted With Class Action Lawsuits Over Crypto Crash

According to recent reports, the Schall Law Firm has decided to join companies filling class action lawsuits against Nvidia. The firm particularly specializes in securities class-action lawsuits and shareholder rights litigation. As per the litigation, Nvidia is accused of issuing false and misleading statements to its stakeholders. According to the claims, the firm misguided its stakeholders on its capability to manage a significant decline in the demand from the crypto market.

In 2017, cryptocurrency saw huge demand which pushed the prices of PC component at an extreme height as everyone from common consumers to huge Chinese cryptocurrency mining industry snapped up GPU’s at an amazing rate. This, in turn, led to shortages and the prices gouged in the graphic. All this, had a serious impact on the escalated prices for other components.

To address the ever increased demand for GPU, AMD boosted the production; however, Nvidia started to stuff the channel with the pursuits of pushing the price back to sensible levels. The demand for the cryptocurrency, however, faded out and as a result, the value of Bitcoin dropped while dragging down the value of other virtual currencies. A sudden shift in the market was felt as the demand for used graphics cards dominated the market and that also at reasonably low rates while worsening the declined demand in retail networks. The market conditions left Nvidia with nearly one to two-quarters of overproduction of some of its graphics cards, especially the GTX 1060. The oversupply led to delayed launch on the Turing 2060 cards which led to initial losses to the firm in the stock market.

Angered of the loses, the Schall Law Firm called for a collaborative class-action lawsuit. The Schall Law Firm has joined the team of the agitated investors who have reportedly lost more than $100,000. In its complaint, the Schall Law Firm has accused the company of making a misleading statement to the market at large. Nvidia has always touted its capabilities to oversee the crypto market and make steady changes to ensure that its business stays intact. The company claimed to have the skills to manage the channels quite well. Nvidia also reportedly claimed that any drop in the demand for company’s GPU will not have a negative impact on its business as its GPU’s are in great demand in the gaming segment. The claims of the company, however, turned out to be misleading as the investors have already suffered great losses.

The lawsuit primarily revolves around the statements issued by Nvidia from time to time pertaining to the crypto market. The modern crypto mining is dynamic in nature. The graphics cards are used by the miners for many purposes like cloud application and more. Predicting the demand of the graphics cards in the market is something near to impossible.

The lawsuit is just another wave of trouble for Nvidia who lost 53% of its value owing to drop in the cryptocurrency and the US trade war with China. Nvidia’s hold in the graphics card market was also put at stake when news claiming Apple, Google and other customers of Nvidia appeared of developing their own AI chips.