Tuesday, April 23, 2019

Nvidia Accused of Falsifying Revenue Report to Save Stock Prices

California-based giant tech company, Nvidia, has been subtly accused of giving a false report of their total of earnings and revenue in 2018, following the crypto hangover of last year’s bear market.

Half Bread Isn’t Enough

The collapse-like nature of 2018’s cryptocurrency market greatly affected tons of companies in the crypto and tech sector, but only a few had it worse than Nvidia. While Nvidia would be mourning what could have been, and be hoping for the sunny times of 2017 once again, some of its customers would not be getting into the ‘sack cloth,’ especially not when the sharp plunge of the crypto market brought an end to the crazy prices at which their graphics cards were now being sold.

For Nvidia, it’s an unfamiliar story they wouldn’t be having fun telling. After 2018 opened gleefully only to see Nvidia lose 19 percent of its stock prices later in the year, the company would have elated to have its stocks bounce back again to record an all-time high at $289.36  on October 1. The good news did not last long though, and Nvidia’s sense of relief quickly evaporated as the crypto market continued its plunge, and the company’s over-enthusiasm to produce thousands of more cards for miners cost it another decline in stocks.

By December, Nvidia’s stock had plummeted again to less than $149, almost 50 percent of its value in October. The tech giant overstock of GTX 1060 cards might be the least of their problems though. The ongoing trade war between US and China is causing more problems for Nvidia than they can salvage: 20 percent of the $9.7 billion revenue it had in a previous year had been raked in from a booming China. Rumors of Softbank group selling their stakes for $3 billion profit might become disastrous if it eventually becomes true.

Cover Up

Nvidia’s response to the sharp plummet of company’s stock prices is to falsify their report of earnings in 2018, according to Royal Bank of Canada Capital Market Analyst Mitch Steves. Steves attributed the company’s fear of sudden fluctuations as a reason for underreporting its total generated revenue.

“We think Nvidia generated $1.95 billion in total revenue related to crypto/blockchain,” he said. “This compares to company’s statement that it generated around $602 million over the same time period.”

However, Steve’s claims are only postulations and are far from concrete, as the analyst concedes Nvidia’s masking of generated revenue was intentional and expertly carried out.

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