AI summary
Summary of article:
The stock price fell 5% before the market opened, after Huida’s founder Huang Renxun was involved in an extramarital affair controversy. The board of directors launched an independent investigation. The market was also worried about the replacement of the CEO and the impact on China’s business.
chip giantHuida (Nvidia, also translated as Nvidia) FounderJen-Hsun Huang (Jensen Huang) is facing investigation by the company’s board of directors for having an extramarital affair with a Chinese female spy. The Wall Street Journal reported that Huida’s stock price fell 5% before the market opened on the 9th. Its market value would have dropped by 200 billion as soon as the market opened, and its market value would have fallen to less than 4.3 trillion. Although it is still the second largest company in the United States by market value, it is pulling away from Apple, which has the largest market value. The report noted that although a Huida spokesperson said Huang Jen-hsun would continue to serve as CEO, investors are paying close attention to whether the CEO will be replaced as a result of the investigation. Another risk that has attracted attention is that chip sales to China may be subject to closer scrutiny because of the Huang Zhen-hsun case.
The report said that Huida became the biggest loser on the Nasdaq Composite 100 Index (Nasdaq-100) on the morning of the 9th. The stock price trend of other chip makers’ rivals was clearly opposite to that of Huida. Advanced Micro Devices’ share price rose 4.5% before the market open, making it the best performer among the Nasdaq-100.
Oppenheimer Holdings Inc. (Oppenheimer) raised its rating for AMD on the evening of the 8th. One reason for the rise in stock prices may be that some investors turned to AMD, frightened by the Jen-Hsun Huang scandal.
Another Huida rival, Broadcom, also rose 3% before the market open.
Huida’s board of directors said on the 8th that a committee composed of independent directors will be responsible for investigating Huang Renxun’s case, and external counsel will provide assistance. However, the board did not specify which directors would be included in the investigation.
Stephen C. Neal, the lead independent director of HUIDA’s board of directors, is Cooley’s chairman emeritus. Neil has been a member of HUIDA’s Board of Directors since 2019 and is Chairman of HUIDA’s Nominating and Corporate Governance Committee. He is believed to be potentially involved in the investigation of this scam.
The report notes that investors are now facing a situation that was unimaginable in the past: Huida without co-founder Huang Renxun.
The report said that this incident could bring Huida’s relations with China under closer scrutiny. Huang has always opposed restrictions on chip sales to China and in an agreement last year he was allowed to sell less advanced artificial intelligence chips to China.
Summary FAQ
-
Because there were rumors that Jen-Hsun Huang was involved in an extramarital affair and would be investigated by the board of directors, investors were worried about the impact on corporate governance and leadership stability, causing Nvidia to fall 5% before the market open.
-
HUIDA’s board of directors said it would investigate the matter by a committee of independent directors with the assistance of external lawyers; However, it has not yet been revealed which directors actually participated in the investigation.
-
The market is also worried that the Huang Zhen-hsun incident will make Huida’s chip sales to China subject to more stringent scrutiny, as it has always opposed restrictions on sales to China, and relevant policies and cooperation may face changes.
