Nvidia being sued, by their shareholders!
"More trouble ahead for the graphics card giants."
Published: 11th September 2008 | Source: Shalov Stone Bonner & Rocco LLP |
More trouble in store for the green giants
Nvidia are facing a class action lawsuit over their recent problems with their GPU failure rates, instigated by shareholders who feel that Nvidia knew about the failure rates quite some time before they made their public announcement on the 2nd of July, 2008. In fact, the plaintiffs are arguing that Nvidia knew about the rates as early as the 7th of November, 2007. Part of their evidence comes from a satement that Micheal Hara made on the 7th of September, 2008, at a Citigroup Technology Conference, that Nvidia had been working on the failure problems for over a year. Hara even specified that work began on a remedy in August, 2007.
The shareholders are further claiming that Nvidia deliberately mislead the investor community and lied about the impact the flaws in their GPU's would have on their financial standing by understating the company's expenses due to these flaws and overstating the company's revenue, income and margin. The shareholders claim that they lost hundreds of millions of dollars due to Nvidia's negligence, when they made their official statement on the 2nd of July, 2008. The day after the statement was made, Nvidia's market capitalisation fell by over $3 billion. After this lawsuit was filed and announced, Nvidia suffered a further 30% fall in share prices.