The Supreme Court on Wednesday weighed a bid from chipmaker Nvidia as it attempts to avoid a suit alleging its executives mislead investors about the extent its sales depended on volatile cryptocurrency miners.
Nvidia asked the Supreme Court to reverse a lower appeals court’s decision that a suit brought by company stockholders met the high legal bar to move forward with securities fraud allegations against the chipmaker.
Some of the justices appeared hesitant about the Supreme Court’s involvement in the legal matter, suggesting the case might not require a blanket rule to make it more difficult for securities fraud claims to be brought forward.
“It’s less and less clear why we took this case and why you should win it,” Justice Elena Kagan said during Wednesday’s oral arguments.
The allegations date back to 2018, when the company announced it missed revenue projections for the prior quarter and expected a year-to-year decline in its total revenues for the following quarter.
Over the next two trading days, Nvidia’s stock price fell by 28.5 percent.
Nvidia offers graphics processing units (GPUs), which are largely used for video games but can also be used in the mining of cryptocurrency. The crypto market is known to be extremely volatile, meaning the demand for these GPUs can fluctuate.
Following the earnings release, Nvidia CEO Jensen Huang told analysts, “The crypto hangover lasted longer than we expected.”
A group of shareholders who held Nvidia stock in the months ahead of the company’s dipped projections argue Huang and the........