Nvidia shares fell 10% on fears of changing the head of the company

Shares of chip maker NVIDIA (NVDA) in the evening trading of the NASDAQ exchange decreased by 10.1% in the postmarket in the United States and at a minimum reached $156.19. Shares of the company fell in the evening trading, as investors feared that Nvidia could be left without CEO Jensen Huang, writes Bloomberg.

By 9:59 GMT, the fall slowed to 7.5%, NVIDIA securities were trading at $160.8 per share.

The fall began after a publication in The New York Times, which claimed that the CEO had an affair with one of his subordinates — Vice President of NVIDIA Kimberly Powell, writes Bloomberg.

The situation worsened when The Wall Street Journal, citing sources familiar with the situation, reported that the board of directors of NVIDIA is preparing to dismiss the founder and CEO of the company Jensen Huang.

Shares of other companies related to artificial intelligence technology fell after shares of Nvidia. CoreWeave fell more than 5%, Intel and Dell Technologies fell 3%, and Super Micro Computer fell more than 4%.

In NVIDIA shares since the beginning of the week, there have been sales after the beginning of the investigation of the company’s board of directors against the head of the company Jensen Huang. He was suspected of “close ties” with the head of the Singapore company Megaspeed Alice Huang, which American intelligence agencies believe recruited by the Ministry of state security of China. According to the Financial Times, the couple had a romantic relationship. American intelligence agencies believe that this could lead to the leak of confidential data on artificial intelligence technologies from the United States and to attempts to circumvent export restrictions.

The Chinese Foreign Ministry called the accusations of an attempt by Chinese intelligence to establish contact with NVIDIA Director General Jensen Huang defamatory.

In addition, it became known that investors filed a class action lawsuit against NVIDIA and its CEO Jensen Huang, in which they are accused of deceiving shareholders by concealing the businessman’s ties with the head of Megaspeed Alice Huang.

According to estimates of the investment bank Yorkville Ives, if Jensen Huang leaves, the fair value of NVIDIA shares will decrease by about 25% to $ 225 per share (versus $ 300 if he remains as CEO). Experts note that both the technology sector and the company’s board of directors are aware that with the advent of new details, the situation is getting worse every day.

If the drop recorded in the postmarket continues, then after the resumption of main trading, NVIDIA’s market capitalization may fall below $4 trillion.

Technology company NVIDIA is one of the world's largest developers of graphics processors and chips for artificial intelligence systems, as well as software. Its developments are used in the fields of video games, high-performance computing, artificial intelligence, unmanned vehicles and so on. The company was founded in 1993. It was founded by 63-year-old Jensen Huang along with two partners, and he has led the company ever since.