Nvidia's share price has plunged 30 per cent since its peak in early October after chief executive Jensen Huang resigned, with losses for the week reaching $490 billion. The 63-year-old quit following revelations of affairs with a suspected Chinese spy and a fellow executive at the company he founded and led for 33 years. His departure sent shockwaves through global markets, with shares falling 14 per cent in early trading before closing down 4.3 per cent on the day of his resignation.
As the world's second largest company by market value, Nvidia accounted for 5 per cent of global stock market value at the start of October and features prominently in many index funds held by UK investors. The sharp decline has hit British savers with pensions and stocks and shares ISAs that hold significant positions in the chipmaker. Huang admitted to being unfaithful to his wife after affairs with Alice Huang, a 42-year-old suspected Beijing agent, and Kimberly Powell, 48, Nvidia's vice-president of healthcare. Reports of a third mistress also surfaced following his resignation.
Colette Kress, the chief financial officer who joined Nvidia in 2013, has taken the helm on an interim basis while the company searches for a permanent successor. The company thanked Huang for his contributions but made no announcement regarding a severance package. Kress previously worked at Texas Instruments, Microsoft and Cisco, and has overseen a period in which Nvidia's revenue grew from £3 billion when she joined to more than £160 billion. She said she is committed to building on the foundation Huang created.
The resignation has triggered uncertainty across the sector, with multiple major brokerages downgrading their ratings on Nvidia stock. Morgan Stanley and Bank of America Global Research removed Nvidia from their top pick lists this week, while Wells Fargo and Citigroup cut their price targets. Tristan Gerra at Robert W Baird slashed his price target from $500 to $200. TD Cowen described Huang's exit as shocking and unprecedented, removing Nvidia as a top pick given the uncertainty.
Huang, whose 3.6 per cent stake in Nvidia made him the world's 12th richest person with a $150 billion net worth, has lost $65 billion since shares peaked in October. His share holdings, once worth up to $440 million in bonus shares, are now worth an estimated $385 million at yesterday's price of $166. Huang was paid $36 million last year and has no employment contract, meaning any severance must be negotiated with the board.
Speculation has begun over Huang's successor, with former Apple chief Tim Cook mentioned as a potential candidate. Trump posted on social media backing Cook for the role, calling him a legend to replace a legend. Cook stepped down as Apple's chief executive in September after 15 years leading the world's most valuable listed company. Nvidia said it would consider both internal and external candidates for the permanent chief executive position.