5 ms·

NVIDIA is required to monitor material risks to its business and disclose them to shareholders. I think in theory the reason for that requirement is so that uns

NVIDIA is required to monitor material risks to its business and disclose them to shareholders. I think in theory the reason for that requirement is so that unsophisticated retail investors don't buy the stock and then lose a bunch of money due to risks they didn't anticipate, though it feels pretty quaint to expect retail investors to read Forms 10-Q. Importantly, they did (according to the press release) know that a big part of their sales growth was from cryptomining. I have no idea how they measured the magnitude, but miners weren't exactly quiet about scooping up graphics cards.

senko 4y ago
> [any public company] is required to monitor material risks to its business and disclose them to shareholders This basically means everything is securities fraud: https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt... The parent question still stands: why would NVIDIA need to police how their products get used? They're not manufacturing weapons or drugs.
- Retric 4y ago
  No, the requirement isn’t perfection but NVIDA is charged with failing to disclose significant risk that they where aware of.
- gpderetta 4y ago
  They do not need to police it. But how their products are used has an impact on the growth of the company as it can affect future demand; it appears that if the company has this sort of knowledge it is supposed to disclose it to investors.
  - singlow 4y ago
    Right. And not just disclose it as a fact, but incorporate it into their projects and risk outlooks.
- JackFr 4y ago
  They don't need to police how their GPU's are being used. They simply need to release fiancial statements which accurately reflect material information they know. That securities law can be abused unscrupulous profit seeking lawyers is not news, and isn't really germane to this case. The issue at hand was disclosing information essential to financial results rather than fanciful hypothetical risks.
- VWWHFSfQ 4y ago
  > NVIDIA did not disclose in its Forms 10-Q, as it was required to do, these significant earnings and cash flow fluctuations related to a volatile business for investors to ascertain the likelihood that past performance was indicative of future performance. Basically they were dishonest about the nature of the business that was driving the short term growth.
  - senko 4y ago
    > NVIDIA did not disclose [...] for investors to ascertain the likelihood that past performance was indicative of future performance. I mean, who am I to argue with SEC, but "past performance is not indicative of future results" should be firmly planted in the minds of everyone remotely capable of understanding the 10-Q. To me this seems like it was a "hey, you should definitely split out crypto earnings in your gaming division" with a slip on the wrist. Doesn't sound like a big deal. And going on the tangent, who says earnings due to crypto are more risky than earnings due to gaming? There's been a dearth of new AAA titles and due to the inflation gamers may very well delay their PC upgrade. Sounds as risky as miners to suddenly stop buying equipment, and faster than what the hardware-hungry gaming crowd can get their hands on.
- Robotbeat 4y ago
  Actually… You could potentially consider a GPU an arm subject to EAR/ITAR regulations. EAR/ITAR are overly broad (in a way that could be unconstitutional), so I wouldn’t rule it out. https://wccftech.com/us-government-bans-intel-nvidia-amd-chips-china/amp/ https://wccftech.com/us-government-bans-intel-nvidia-amd-chi...
sokoloff 4y ago
> it feels pretty quaint to expect retail investors to read Forms 10-Q It's not that there's an expectation that retail (or any given) investor reads the 10-Q; it's sufficient that there is a standardized way to publicize that information and, if you lose money because you didn't read the readily available information, well, you're an adult who can make investment decisions on whatever criteria you want and that's on you.

senko 4y ago

> [any public company] is required to monitor material risks to its business and disclose them to shareholders This basically means everything is securities fraud: https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt... The parent question still stands: why would NVIDIA need to police how their products get used? They're not manufacturing weapons or drugs.

Retric 4y ago
No, the requirement isn’t perfection but NVIDA is charged with failing to disclose significant risk that they where aware of.
gpderetta 4y ago
They do not need to police it. But how their products are used has an impact on the growth of the company as it can affect future demand; it appears that if the company has this sort of knowledge it is supposed to disclose it to investors.
- singlow 4y ago
  Right. And not just disclose it as a fact, but incorporate it into their projects and risk outlooks.
JackFr 4y ago
They don't need to police how their GPU's are being used. They simply need to release fiancial statements which accurately reflect material information they know. That securities law can be abused unscrupulous profit seeking lawyers is not news, and isn't really germane to this case. The issue at hand was disclosing information essential to financial results rather than fanciful hypothetical risks.
VWWHFSfQ 4y ago
> NVIDIA did not disclose in its Forms 10-Q, as it was required to do, these significant earnings and cash flow fluctuations related to a volatile business for investors to ascertain the likelihood that past performance was indicative of future performance. Basically they were dishonest about the nature of the business that was driving the short term growth.
- senko 4y ago
  > NVIDIA did not disclose [...] for investors to ascertain the likelihood that past performance was indicative of future performance. I mean, who am I to argue with SEC, but "past performance is not indicative of future results" should be firmly planted in the minds of everyone remotely capable of understanding the 10-Q. To me this seems like it was a "hey, you should definitely split out crypto earnings in your gaming division" with a slip on the wrist. Doesn't sound like a big deal. And going on the tangent, who says earnings due to crypto are more risky than earnings due to gaming? There's been a dearth of new AAA titles and due to the inflation gamers may very well delay their PC upgrade. Sounds as risky as miners to suddenly stop buying equipment, and faster than what the hardware-hungry gaming crowd can get their hands on.
Robotbeat 4y ago
Actually… You could potentially consider a GPU an arm subject to EAR/ITAR regulations. EAR/ITAR are overly broad (in a way that could be unconstitutional), so I wouldn’t rule it out. https://wccftech.com/us-government-bans-intel-nvidia-amd-chips-china/amp/ https://wccftech.com/us-government-bans-intel-nvidia-amd-chi...

sokoloff 4y ago

> it feels pretty quaint to expect retail investors to read Forms 10-Q It's not that there's an expectation that retail (or any given) investor reads the 10-Q; it's sufficient that there is a standardized way to publicize that information and, if you lose money because you didn't read the readily available information, well, you're an adult who can make investment decisions on whatever criteria you want and that's on you.