In the latest update, the investors are suing senior members of the NVIDIA company for misinforming them about the revenue collected on their cryptocurrency sales. The senior members include NVIDIA’s chief executive, Jensen Huang, executive vice president, Jeff Fisher, and chief financial officer, Collette Kress, as well.
Nvidia’s Misrepresenting $1.1 Billion of Cryptocurrency Product Revenue causes rage among investors
The lawsuit against the misinformation of NVIDIA was filed by the investors earlier this week. They directly mentioned the senior officials of the company responsible for the aforementioned understatement about the revenue obtained by the sales of cryptocurrency products. To further support their allegations, the complainants used a testimony provided by five former employees from NVIDIA. These former employees served in different departments of the company located in different regions of the world including California, China, and Russia.
Most of the cryptocurrency mining operations were in process in Russia and China, Thus, the statements of the employees from these countries can play a significant role in assessing the entire affair neutrally.
What ignited the matter?
According to the lawsuit complaint, the company was alleged for misleading investors in the entire affair. Moreover, they stated that the revenue earned by selling cryptocurrency mining products was insignificant compared to the total revenue of the company during the time period covered by the lawsuit.
The complainants also stated that NVIDIA claimed that the boost obtained in the gaming revenue happened by the sales made to gamers and nor individual miners. They also complained that the company only showed the revenue obtained from mining products in the OEM segment only. Whereas, in reality, two-thirds of mining reflected in the gaming segment of the company.
During the lawsuit time duration, the complaint filers claimed that the management of NVIDIA company continued to closely monitor the source of its revenue. In the statement, they claimed that the company quantified miners’ GeForce sales data specifically in their meetings.
They used to hold quarterly meetings in which the vice president of the company used to present the crypto sales data to the chief executive by analyzing the weekly sales data. They studied the usage data from GeForce experience and commissioned an internal study to analyze the percentage revenue obtained from selling the graphics cards to miners.
This means that NVIDIA’s management was fully aware of the extent of sales obtained from selling its products to the miners as opposed to the gamers. The data gathered by NVIDIA’s sales team in China showed that more than 60% of the NVIDIA’s GeForce sales in the country were made through purchases made by miners instead of gamers, throughout 2017.
Lawsuit Claims Nvidia kept quiet about cryptomining biz
Till now, the claimants of the suit commissioned a consulting firm, Prysm Group, to analyze the extent of the misrepresentation of mining product revenue by NVIDIA. According to their analysis, NVIDIA earned roughly $1.73 billion in revenue from selling its products to the miners from May 2017 to the end of July 2018. This implies that during this time period, the company classified $1.1 billion of mining revenue to its Gaming division instead of the OEM division as promised by them.