According to the SEC, the company did not disclose this information for two consecutive quarters for fiscal 2018. During this period, the company’s tax reports were vague, indicating only that it had revenue growth in the segment. games .
By intentionally omitting the reason for this increase, investors were unable to make clear decisions about their future investments. Given the volatility of cryptocurrencies, that means Nvidia’s sales numbers don’t necessarily point to certain future growth, making investing in the company riskier.
“Nvidia analysts and investors have sought to understand the extent to which the company’s gaming revenue has been affected by cryptocurrency mining and have regularly questioned the company’s management about the extent to which revenue increases games over this period were driven by cryptocurrency mining,” the SEC says.
Despite this, Nvidia did not cite mining-related sales as a success factor for its games division. At the same time, she mentioned cryptocurrencies as an important factor in other markets, which suggested to the SEC that Nvidia was deliberately misleading. And investors’ concerns turned out to be correct. A cryptocurrency crash in late 2018, coupled with a weaker Chinese market, cut quarterly earnings projections by $500 million and led to a lawsuit by shareholders.
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“Nvidia’s disclosure failures deprived investors of critical information to assess the company’s business in a key market,” said Kristina Littman, head of the SEC’s Cryptocurrency and Cyber Unit.
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Cryptocurrency mining has become extremely popular in recent years, but the increased difficulty of mining some of the most popular coins, such as Bitcoin and Ethereum, has led some to question the long-term viability of mining. . Also, some cryptocurrencies are moving away from the current method of mining, which could become obsolete.
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This could be a good thing, as it reduces the carbon footprint, and it’s also better for gamers, as it means it will be easier for them to get their hands on better graphics cards.
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The SEC document attesting to the agreement between the commission and Nvidia can be viewed at the following address ici. The SEC press release can be viewed ici.
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