Shares of world's most valued company Nvidia tumbled over 4% before the opening bell on Monday, November 9 after the chip-making giant's CEO Jensen Huang admitted to an extramarital affair and apologised to his family and colleagues but did not name the woman.
Nvidia shares declined 4.78% to $177.71 a piece by 4:05 am EST.
The dip in shares come as Nvidia's board said a committee of independent directors, assisted by outside counsel, would lead the investigation over Huang's links to alleged Chinese spy. The board said it had no reason to believe US national security or Nvidia's secrets had been compromised and that it would examine all available information.
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The company's board, in a statement issued on Sunday, said it was "initiating an independent investigation in light of recent reporting that founder and CEO Jensen Huang has been the target of a foreign intelligence effort." It said a committee of independent directors, "assisted by outside independent counsel, will oversee the investigation."
Last month, the New York Times reported that Huang had a close relationship with Alice Huang, a former executive of Singapore-based Megaspeed who is not related to him. The newspaper said US authorities had concluded she was a Chinese intelligence asset. Beijing has rejected the allegations, and no charges have been filed against Huang or Nvidia.
What Does Recent Share Dip Mean For Nvidia?
Chris Weston, head of research at brokerage Pepperstone in Melbourne says that the recent decline in share price is a verdict on Huang's future. He told Reuters he did not expect Huang to be replaced. If investors genuinely believed the CEO was on his way out, Weston said, "it would be an absolute bloodbath, to be honest."
Weston's argued that a 4% dip is a hit to sentiment, not a vote of no confidence. He told the news agency that the episode does the stock no favours at a time when investors are already arguing over the pace of the data-centre build-out.
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