Monday, May 18th 2020
NVIDIA Investors Claw Back at Company, Claiming $1 Billion Mining GPU Revenue Hidden Away in the Gaming Division
NVIDIA investors have recently filed a suit against the company, claiming that NVIDIA wrongfully detailed its revenue indicators between departments. The main point of contention here is that investors claim NVIDIA knowingly obfuscated the total value of the crypto market boom (and subsequent bust) from investors, thus painting a picture of the company's outlook than was different from reality (making demand for the Gaming division look higher than it was in reality) and exposing them to a different state of affairs and revenue gains than they expected. The investors say that NVIDIA knew that a not insignificant number of its graphics cards sold between 2017 and 2018 was being bought-up solely for the purpose of crypto mining, and that the company knew this (and even marketed GPUs specifically for that purpose).
The crypto mining boom had miners gobbling up all NVIDIA and AMD graphics cards that they could, with both companies seemingly increasing production to meet the crypto mining bubble demand. However, due to the economics of crypto mining, it was clear that any profits derived from this bubble would ultimately open the door to an explosive logistics problem, as miners offloaded their graphics cards to the second-hand market, which could ultimately harm NVIDIA's financial book. Of course, one can look at NVIDIA's revenue categories at the time to see that crypto would hardly fit neatly into either the Gaming, Professional Visualization, Datacenter, Auto, or OEM & IP divisions.
Sources:
The Register, via Tom's Hardware
The crypto mining boom had miners gobbling up all NVIDIA and AMD graphics cards that they could, with both companies seemingly increasing production to meet the crypto mining bubble demand. However, due to the economics of crypto mining, it was clear that any profits derived from this bubble would ultimately open the door to an explosive logistics problem, as miners offloaded their graphics cards to the second-hand market, which could ultimately harm NVIDIA's financial book. Of course, one can look at NVIDIA's revenue categories at the time to see that crypto would hardly fit neatly into either the Gaming, Professional Visualization, Datacenter, Auto, or OEM & IP divisions.
37 Comments on NVIDIA Investors Claw Back at Company, Claiming $1 Billion Mining GPU Revenue Hidden Away in the Gaming Division
darkbright side :toast:Basically, Öhman Group are butthurt about NV stock plunge of Q4 2018-Q1 2019, which as I said before has nothing to do with mining, and definitely has everything to do with Softbank's sneaky collar trade.
The entire document is filled with speculations that either are irrelevant, or not backed by any facts , or make zero sense. Basically 80+ pages of speculations and repeating same speculations over and over.
For example, their primary focus is on Jensen having a centralized GFE database which showed that 60% of their GPUs are used for mining... Firstly, large mining farms likely don't have GFE. Second, if such stat actually existed, it would most likely include exclusively gamers that dabbled at ether mining at one point or another, got infected with cryptomalware which became a widespread thing at the time.
Another thing is their obsession with misinterpreting charts and numbers. Sales figures were always on public and it's kinda hard to miss the consistency of peaking sales and new GPU releases, plunging sales coinciding with something stupid NV did etc. Mining was consistently on the downfall for that period, which begs the question how come a 1+bn part of company's business had such a small impact on numbers? No amount of "misinterpreting" and "misrepresenting" can hide this.
That's why NVidia stock not only recovered and leveled-out, but as of today is >10% higher than previous all-time peak.
Hersey and gossip isn't a factual document, powerpoint slides aren't evidence. It all boils down to "Jensen Huang has the stuff", and even if that's the case I'm sure it won't be presented as such in court (if it ever gets there).
And the following boost had nothing to do with Mellanox acquisition, I assume?