Jensen Huang, who resigned Thursday as CEO of Nvidia Corp. (NASDAQ:NVDA), had an intimate relationship with a second company employee, Reuters reported, citing two people familiar with the matter.
Reuters did not name the woman and said its attempts to reach her were unsuccessful.
The report widens a scandal already involving two women. One is Alice Huang, whom U.S. intelligence officials reportedly suspect of being a Chinese spy. The other is Kimberly Powell, Nvidia’s vice president of health care.
- NVDA stock is getting crushed. See the details here.
Board Support Collapsed Within Days
On Sunday, Huang admitted to an affair following reports of his relationship with Alice Huang. Nvidia’s board said it had confidence in its CEO. By Thursday, it had accepted his resignation.
A report Wednesday said Huang had also allegedly had a relationship with Powell, who reported to him, and that the board was preparing to remove him.
On Thursday morning, Huang resigned as president, CEO and board member, effective immediately, with CFO Colette Kress taking over as interim CEO.
Shares Slide to 52-Week Low
Investors sold, sending Nvidia shares down 5.6% to $163.94 Thursday afternoon after a drop of as much as 14.3% to a 52-week low of $148.80 at the open, according to Benzinga Pro data.
Analysts moved fast. Bernstein downgraded Nvidia to Market Perform and cut its price target in half, to $200 from $400.
Yorkville Ives analyst Dan Ives said the firm values the stock at $225 without Huang, versus $300 with him as CEO. Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, said the stock now carries a "leadership discount" as the premium tied to Huang fades.
Rivals Gain, Other Chip Names Slip
Investors rotated into rival chipmakers Thursday. Advanced Micro Devices Inc. (NASDAQ:AMD) and Broadcom Inc. (NASDAQ:AVGO) both rose more than 5% on bets Nvidia’s troubles could steer more chip business their way.
Not every chip stock benefited, however. Intel Corp. (NASDAQ:INTC), Marvell Technology Inc. (NASDAQ:MRVL) and Arm Holdings plc (NASDAQ:ARM) all traded lower Thursday afternoon, according to Benzinga Pro market data.
Nvidia is scheduled to report quarterly earnings on Nov. 17, with Kress leading the company on an interim basis. Investors will be watching for further developments until then.
NVDA Price Action: Nvidia shares were down 5.64% at $163.94 at the time of publication Thursday, according to Benzinga Pro data.
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