The first step when a business is presented with a lawsuit is to try to get it dismissed. It might be successful, saving huge amounts of money and resources, or the request may fall on deaf ears. Either way, it’s a gamble worth taking. Nvidia has been slapped with a lawsuit by investors, who claim that the computer technology company was “misleading” when it presented what cryptocurrency mining equipment could produce in returns. The company has now taken that first step, Law360 reported.
The case was first brought up in December 2018 after Nvidia’s 2018 performance, like that of many tech companies, wasn’t as strong as had been expected. The investors assert, however, the Nvidia brought some of the trouble on themselves, providing return data and crypto mining demand figures that were not based on actual performances but were, instead, speculation.
At the end of 2017, it looked like 2018 was going to be a huge year for the crypto mining equipment segment. Many companies, like Nvidia, were ready to capitalize on the forecast sustained growth that was to come in 2018, but that didn’t happen. There wasn’t a mad rush on processors that were specific to crypto mining, with miners still preferring the GeForce chip, and the crypto chip segment didn’t climb the way people had expected.
The investors assert that Nvidia presented the company’s revenue possibilities as being tied more to higher gaming revenues, which would be separate from the crypto mining chip segment. However, in August 2018, they realized that the two were intrinsically combined and determined that weaker sales in the crypto chip segment were affecting gaming chip sales, as well.
Nvidia believes the lawsuit doesn’t have any merit, arguing that the investors are only “cherry-picking” data to try to support their case. It adds that the investors’ lawsuit doesn’t provide any evidence that would tie losses to any certain disclosure, nor does it provide any evidence regarding who may have been involved in any alleged wrongdoing.
Absent that data, the lawsuit should be thrown out, according to Nvidia. However, the mere suggestion of financial improprieties is enough for a judge to allow the case to move forward, and force both sides to prove their innocence in court. As with similar cases that have taken place in the past, and some that are still ongoing, it’s going to take a couple of years for the case to make its rounds through the courts.
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