Nvidia Execs Sweating as Shareholders Vow Revenge for Crypto Mining Scandal…

Welp, it looks like Nvidia’s Supreme Court Hail Mary just got intercepted. The Boys (& Girls) with the big swingin’ gavels unceremoniously went full-on “we’ve got bigger fish to fry,” as they dismissed Nvidia’s appeal in a shareholder lawsuit accusing the chip giant of playing a little fast and loose with the truth about its crypto-mining revenue. And by “dismissed,” I mean they basically said, “Why did we even take this case in the first place?” Ooof..

(Source: Giphy) 

ICYMI, the case revolves around allegations that Nvidia *checks notes*  “forgot” to mention just how much of its bread was being buttered by the cryptocurrency boom back in the day. Specifically, the plaintiffs—an investment firm and a pension fund—claim Nvidia downplayed its reliance on crypto-mining revenue to shareholders, right before the 2018 crypto crash sent its stock price into a 28% nosedive. Understandably, I can see the grudge here.  

(Source: CoinTelegraph) 

On the other end of the stick, Nvidia’s legal team argued that the case didn’t have enough meat on the bone to survive under the Private Securities Litigation Reform Act (see: The “Stop Suing Us, Bro” law of 1995). Yet, even though a lower district court initially agreed (read: paid off?), sending the case to the corporate graveyard—the Ninth Circuit Court of Appeals pulled a Lazarus and revived it, deciding the lawsuit deserved its day in court. Of course, Nvidia hoped the Supremes would save them, but alas, the justices decided they had better things to do than wade through the technical weeds of crypto-mining disclosures.

Meanwhile, during oral arguments last month, the justices made it clear they were simply just not feeling this one. Justice Elena Kagan basically said, “Why are we even here?” while Justice Samuel Alito threw his hands up at the case’s complexity, sounding like my frustrated 85 year old grandma who's still trying to figure out Facebook. So yeah, Nvidia is officially in hot water here, with no way out basically. 

(Source: Giphy) 

The worst part? Nvidia doesn’t necessarily have a stellar track record when it comes to crypto clusterf**ks. For instance, back in 2022, the company shelled out $5.5 million to the SEC for failing to disclose just how much of its gaming sales were actually fueled by crypto miners. (Fun fact: “failing to disclose” is management speak for “we totally knew, but hoped no one would notice.”)

(Source: Wall Street Journal) 

So again, with one ding on their record already and an appeal that’s been yeeted by the U.S. Supreme Court—Nvidia will likely be paying out an even bigger L to make this go away. However, with that said, despite this courtroom TKO, Nvidia’s stock is still riding high—up 189% this year—thanks to its chokehold on the AI chip market. 

So, yeah, while this lawsuit drags on, Nvidia execs are probably too busy counting their fat stacks to really sweat it. As for the grudgened shareholders? They just got a green light to keep the lawsuit alive. In the meantime though, this story ain’t over, so keep your eyes out and place your bets accordingly, friends—as always, stay safe and stay frosty! Until next time…

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Stocks.News does not hold positions in companies mentioned in the article.