Nvidia could face class-action lawsuit over crypto-mining GPU demand

The majority of 2018 was unfortunately quite disappointing for PC gaming enthusiasts. The crypto-mining market had sent graphics card prices into a frenzy and when Bitcoin eventually began crashing back down, prices did not adjust quickly enough. This left Nvidia in an awkward position later in the year, as the company had to try and sell remaining inventory of Pascal GPUs alongside its new RTX 20-series. This has left some investors feeling burned, with share prices in flux and a class-action lawsuit now being tossed around.

Since reporting lower than expected earnings in Q3, Nvidia shares have been on the decline. Now there is more bad news, as California-based law firm, Schall Law, is preparing a class-action lawsuit against Nvidia, claiming that the company made “false and misleading statements to the market”. According to the firm, Nvidia “touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary”. The idea was that if cryptocurrency went bust, strong demand from gamers would carry the remaining load.

Image credit: Nvidia

Schall Law writes that at one point Nvidia claimed to be “masters at managing” its channel. The law firm claims that this was untruthful to investors, as weakened crypto-demand did have a negative impact on shares.

With all of that being said, it is important to point out that while Schall Law is preparing a lawsuit, class action status has not been certified. At the moment, the firm is looking to get investors who suffered a loss of $100,000 or more to back the lawsuit. A judge will then take a look and approve or deny ‘class action’ status after the 19th of February.

KitGuru Says: Law firms tend to shop around class-action lawsuits regularly. Given Nvidia’s share price decline, this isn’t too surprising. All we can do for now is wait and see how this shakes out, as the suit might not get enough momentum for class-action status. 

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