NVIDIA Fined $5.5 Million Fine As it did not Disclose 2018 Crypto Revenue

They have to report it because it's misleading to investors if Nvidia gaming sales double/triple/whatever and a huge chunk of that is not gaming, it's mining -- which is short term and Nvidia knows it's mining, which is the crux of the issue here (that nvidia knew internally that these cards were being used for mining but didn't disclose it). This is because investors think "oh gaming is doing really good and is much bigger than we previously thought, let's invest on this sector that's relatively stable and showing growth" when it could have been "well a huge chunk of these sales are being used for mining, and that's very volatile and could randomly go belly up, let's not invest" had Nvidia disclosed it.

CMP wasn't released at the time. I know they had weird specific cards throughout 2018 they released, P106's for example with no displays but idk if that was from Nvidia or partners just trying to cash in but this was from 2017-2018. There's also been articles released about this lawsuit that claims Nvidia has done a better job of tracking these sales through partners themselves.. which makes me think they didn't have a good grasp on it in 2017 anyway.

I think the number of people doing professional work on gaming cards is miniscule compared to the sales to miners during these mining booms - also it's a pretty consistent number... it's not like from one generation to a next the number of people using gaming cards to do professional work suddenly doubles or triple sales.

 

lol wait until they fine them for 2021 Jensen will have to pawn the jacket.

 

5.5mill only they probably made hundred upon hundred of mill in that time frame if you your fine company, fine them equal to ammount they generated from doing in first place, they will stop trying to cheat and hidden things, cause it will no longer be profitable

 

Do retail outlets force the customers to disclose how they are going to be using the product? The numbers were not wrong or the fine would have been about a material misstatement. All this is about is that they did not have a footnote disclosure and/or mention it in the MD&A section. Failure to disclose the economic impact the mining industry had on their sales; was it increasing and was it just a blip or going to be an ongoing serious segment supporting their sales figures. They took a calculated risk by not mentioning it because it was a grey area of whether or not there was a need to have such a disclosure. That is why the slap on the wrist fine and was not more serious. Nvidia did not audit themselves.

This is not so much a story about Nvidia failing to include a disclosure but a comment about the independent auditors they utilize. All 10Qs and Ks are verified by such auditors before they are submitted to the SEC. Obviously it was not a serious enough offense for the auditors to render a qualified opinion. So why all the nonsense? This is just a click-bate article.

 

5,5 millions?
What's that, a fine for ants?

 

Sorry, I had forgotten CMP wasn't released at the time.

As for Gaming showing a massive uptick in a short space of time it's obviously not stable and any investment there is (to me anyway) high risk.

Thanks for trying to explain it too me, but I still just think this lawsuit is based on stupid business rules that make no sense and serve no real purpose. Outside of making pointless paperwork.

I'd say professional work being performed on gaming hardware makes up a surprising amount of sales per generation. Any professional that requires good computing performance and doesn't require the support that quadro (or whatever it's called now) is going to buy gaming as the professional equivalents are ludicrously expensive for what they are. If you thought scalper prices on GPUs were bad.... I've been issued a gaming laptop at the last few places I've worked.

 

About time Nividia should have been punished! For their Crypto crap!

 

People who invest in Nvidia are generally rational investors who want a safe, predictable place to invest their money in. They would not be happy to see the company base its sales or growth estimates on a volatile, highly unpredictable segment of the market (crypto). They may appreciate the profit generated from crypto as a side benefit, but ultimately they are investing in a tech company with certain goals, expectations. Thats likely the reason Nvidia tried to hide this from their investors (if intentional).

 

$5.5 million... the execs spend more than that at lunch...

 

While 5.5 Mill is a "slap on the wrist" as already pointed out, this does not limit shareholders ability to sue nVidia themselves.
SEC just got their cut basicly.

 

Yeah, and I can't wait to see Nvidia lie about it for this last mining boom. I guess they will claim their 3000 series sold out constantly to gamers even at hugely inflated prices, but oddly enough, hardly any gamers ended up with one.

 

No, it's a fine for aphids that the ants farm.

Jensen wipes his ass with more than $5.5M USD. Even as a cost of "business" (calculated cost for lying/cheating/doing illegal BS in general) this is beyond a joke.

Whoever handed down that fine is basically saying nVidia are above the law.

 

I agree it wont impact their overall company profit much but this should improve matters because...

The fine is equivalent to 3,666 3090 FE cards @retail of $1,500.
If profit is 1/3 of that, they are losing the profit on 11,000 3090 cards.
This impacts whether the cards are worth releasing or their pricing in the future to keep profit margins up, reducing their competitive edge.

It also reduces the companies % profit margin which they are very proud of, catching investors attention.
And NVidia wont want to be seen as a liability for future issues like this, they do not want a repeat.