The value of Nvidia shares has strung together another session of sharp declines on the New York Stock Exchange, with an intraday drop that has reached 6.25%, amid the commotion over the involvement of its CEO, Jensen Huang, in an investigation related to an extramarital affair with a businesswoman who is also being investigated for alleged spying in favor of China.
In this context, the titles of the semiconductor giant were trading around $167, compared with $178.67 at the close of the previous session, which implies that in just one day the company has seen nearly $280 billion (€250 billion) in market capitalization evaporate.
Tuesday’s stumble adds to the punishment already suffered on Monday, when the session ended with a correction of 4.27%. Taken together, the slump is around 10.5% in only two days of trading and translates into a loss of almost $500 billion (€448 billion) in value in the market.
This deterioration in the stock market comes as Nvidia tries to maintain its position as the world’s second-largest company by market capitalization, after Apple has overtaken it in recent weeks and Microsoft is nipping at its heels following the recent declines. In fact, at some points Microsoft has come to be positioned above Nvidia.
Since the all-time high set just over a month ago, the technology company’s shares have moved from $243 to the $167 recorded this Tuesday, which represents a 32% drop and a cumulative stock-market plunge of $1.8 trillion (€1.6 trillion).
The scandal surrounding Jensen Huang’s extramarital relationship and its possible impact on national security has hit Nvidia’s stock price hard, right as there is only one week left for the company to present the corresponding third-quarter results.
The origin of the crisis lies in the link between Nvidia’s CEO and businesswoman Alice Huang, whose company was acquiring advanced chips from the U.S. manufacturer and which, according to reports by the newspapers "The New York Times" and "Financial Times", would have been under surveillance by U.S. intelligence services after it was suspected that she had been recruited by China. The Chinese Executive, for its part, has described these allegations this same Monday as "pure invention and calumny".
In the face of these revelations, the board of directors of the multinational announced on Sunday the opening of an "independent investigation" into the reports that link this businesswoman of Chinese nationality, a resident of Singapore, with the head of the firm, Jensen Huang. The executive, who has admitted to the extramarital relationship, would have been "the target of a foreign intelligence operation," as Ndivia indicated in its official statement.