Nvidia shares lose half their value, Softbank looks to sell up
Nvidia isn't having a festive holiday seasonBy Rob Thubron 35 comments
In brief: For those who aren't invested in the industry, the cryptocurrency crash came as good news: it meant an end to obscenely priced graphics cards. But for Nvidia, the "crypto hangover" has seen the company's stock fall by almost half its value---and major investor Softbank wants out.
Since reaching an all-time peak of $289.36 on October 1, the chipmaker's stock has fallen 48.8 percent to just under $149. Signs of this plummet appeared a few weeks ago when Nvidia's share price reached its lowest point since July 2017 as Bitcoin dropped to $3755---the crypto is currently at $3365.
Nvidia admits it failed to predict the decline of cryptocurrency mining, which was a major contributor to the company's record quarters. Overestimating demand from miners has left the firm with an overstock of GTX 1060 cards, which could delay the release of mid-range Turing cards, but having "excess channel inventory" isn't its only problem.
Nvidia is facing increased competition in its other businesses, and the US-China trade war is hitting it hard. The Wall Street Journal notes that 20% of the company's $9.7 billion revenue last year came from China. There's also the RTX 2000-series, which has been criticized for its high prices. The dearth of real-time ray tracing games hasn't helped the cause, either.
But things could get even worse for Nvidia. A Bloomberg report citing unnamed sources claims that Softbank Group, Nvidia's fourth-largest shareholder, is considering selling its stake in the company next year, bringing the Japanese conglomerate $3 billion in profit. The potential move is said to have been prompted by Nvidia's falling share price, which dropped again on the back of the news.