Nvidia's board of directors has launched an independent review concerning the company's head, Jensen Huang. This was announced on November 8. It will be conducted by the independent members of the board together with outside lawyers.
Trading happened off-exchange. U.S. exchanges are closed on Sunday, so crypto derivatives and over-the-counter venues were the first to reprice the stock. An over-the-counter venue is a place where a stock is traded outside an exchange, including during its non-working hours.
For a trader, this means the stock has already moved away from the Nasdaq closing level, even though the exchange itself has not yet opened.
What did the board decide?
All available information will be reviewed. The company stated that it sees no signs of a leak of classified data or a threat to U.S. national security.
- Jensen Huang remains in his post - this was stated by Nvidia representative John Rizzo.
- The company's operations will not be affected - Rizzo voiced the same position.
- Outside lawyers are assisting the independent members of the board of directors.
Where did this come from?
- October 29. The New York Times reported that U.S. intelligence agencies suspect former head of Singapore-based Megaspeed Alice Huang of passing data to Chinese authorities. Huang may have been a target of intelligence.
- Accelerator purchases. Megaspeed bought advanced artificial intelligence accelerators from Nvidia. Authorities had previously investigated whether it helped circumvent export bans on chips.
- August. It was reported that Chinese companies, including Alibaba, were gaining access to Nvidia chips through data centers in Malaysia and Thailand.
- November 8. In a message to employees, Huang admitted to marital infidelity. He did not name the woman.
How did the stock trade?
- -4.5%, to $178 - perpetual contracts NVDA-USDC on Hyperliquid over 24 hours, turnover $195 million.
- around $180.3 - the price on the over-the-counter venue Blue Ocean.
- 3.4% below the Nasdaq close on November 6, that is, the level of $186.64.
Key point: the price gap appeared before the exchange opened, and on Monday the stock will start from these values. How to trade such a gap on a prop firm account is covered in the academy.
What's next?
The nearest date is November 18. The chairs of three U.S. House committees will hold a closed briefing with Huang. The topic is national security risks and protecting the company from foreign espionage.
- Dan Ives expects growing congressional attention and heightened uncertainty in the stock.
- Josh Gilbert of eToro believes that in the long run the story will only affect Nvidia if there is a change in leadership.
Keep up with the next U.S. market events in the economic calendar.
Nvidia drags the whole index, but your lot stays the same
On Monday, the Nasdaq and S&P 500 will open with this gap, and you will be trading it with your usual volume. The stock has the largest weight in the index, and a 3-4% move in it moves the entire futures contract. On a personal deposit, such a candle amounts to a couple dozen dollars. Prop trading gives you the company's trading notional: you pay for the selection, work within its loss limits, and share profits under the contract. There is still time before the open to understand how this scheme works.