The shares price of Nvidia has dropped down by 48 percent from October which is just around half of the value. Further, as per sources, SoftBank is planning to sell its 4.9 percent share in the (leading) graphics chip maker. Nvidia graphics chip deals with gaming machines.
As per the Bloomberg report, SoftBank had acquired Nvidia shares of around $3 billion in the year 2017 from Vision Fund. It also said that SoftBank might sell the entire or part of its stake at the beginning of the (next) year.
Crypto issues not affecting the price of Nvidia shares
At one point in time, there were controversies regarding the fall of Nvidia shares that were affecting the performance of cryptocurrency prices.
However, as per the CCN opinion, Nvidia had exited the market long back when Bitmain was gaining. It also reported that there is no relation between Nvidia shares and cryptocurrency market which should hamper the shares price of Nvidia shares. The actual reason which affected the prices of Nvidia shares is the reduction of demand in graphics processor unit (GPU) mining chips, apparently because the other two mining chip projects such as ASIC and machines were performing much better in the market due to their efficiency level, which was exclusively designed only for the purpose of cryptocurrency mining.
However, the demand for cryptocurrency mining equipment was extremely high when Nvidia was totally out of the market. With the growing technology, various competitors such as Bitmain, Canaan, and Samsung are also mounting up enormously. The large-scale crypto mining operations are one of the actual sources which are sufficient enough to create demand of such specialist machines. In August, Nvidia CFO Collette Kress expressed his opinion that “Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”
In the previous month, CNBC Mad Money’s Jim Cramer demonstrated a possible reason for Nvidia’s abrupt woes and quoted that “Nvidia still makes the best graphics chips, which have become more powerful than traditional microprocessors. It still has a lead over the competition in a lot of uses, although you could argue that AMD’s catching up to them in the data center while Intel rivals them in self-driving vehicles. I think Nvidia made an honest forecasting mistake.”
Even though Nvidia’s share price has dropped down to one of the lowest levels, it still deals with one of the largest gaming graphics card maker. However, even if SoftBank sells its Nvidia share, they will still earn $3 billion from such deal, as it constructed a “collar-trade” to defend against a share price decline.