Nvidia gets rare downgrade as Baird raises CEO uncertainities

Detailed summary

The weakening sentiment follows a period of heavy volatility.

The affair is probably a non-issue in valuation terms. That she is a Chinese spy raises issues with whether he/Nvidia knew or should have known that the chips he sold to her company were intended to breach sanctions. That too probably not a mountain.

More of a concern or valuation impact is going to be shareholder lawsuits.

The issue is not new and this will complicate the lawsuits. NYT reported extensively on their relationship and where chips were going 13 months ago. The US State Dept was flagging this for a while though it is unknown who all they informed except white house and secret service. A shorts research firm also issued a flag in May. Nvidia can’t claim this was a bolt from the blue.

With shareholder losses in the half trillion ball park this can become the biggest legal settlement ever.

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