Nvidia stock fell more than 8% last night in after-hours trading, after The Wall Street Journal reported the board was preparing to oust CEO Jensen Huang. According to reports, at one point the drop exceeded 9%. If the decline holds in regular trading today, it would be one of the stock's sharpest daily drops this year.
How much has the stock lost since the affair began?
According to Tom's Hardware, since the affair began, when Huang admitted on November 8 to a relationship with Alice Huang, the stock has fallen about 20%. On Monday alone it fell 4.3%, and on Tuesday it kept falling, as hotter-than-expected inflation data also weighed on the market.
Why are investors reacting so strongly?
Because Huang is not just a CEO. He is Nvidia's face to its biggest customers, to Washington and to China, and he set all of the company's strategic bets. Nvidia has no known successor, so any departure scenario carries great uncertainty. On the other hand, some investors may see an orderly change as a way to end the affair after a week of damaging headlines.
What next?
Next week, on November 17, Nvidia reports quarterly results. Until a few days ago, the main question was guidance on chip demand. Now the first question will be who faces investors on the conference call. For Israelis holding the stock, directly or through Nasdaq tracker funds, it is worth remembering that Nvidia is one of the largest components of those indexes. This article is not investment advice.
