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Nvidia Delays 2Q Reports On Internal Stock Audit

Graphics chip manufacturer Nvidia announced on Thursday that it would delay the public release of the bulk of its second quarter fiscal 2007 financial earnings, on the ba...

Jason Dobson, Blogger

August 11, 2006

1 Min Read
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Graphics chip manufacturer Nvidia announced on Thursday that it would delay the public release of the bulk of its second quarter fiscal 2007 financial earnings, on the back of a voluntary internal investigation over the company's stock options practices, going back to 1999 when the company first went public. Nvidia noted that it does not expect to file its second fiscal quarter financial report by the September 8 deadline or the permitted extension of September 13. The company also commented that the Securities and Exchange Commission (SEC) has been notified of the investigation. The news caused the company's stock to fall 11 percent to $21.58 before opening today at $22.40. The stock is currently trading at $23.67. The company did report that its revenue for the period increased 20 percent to $687.5 million, up from the $574.8 million reported last year. Nvidia commented that “although the review is ongoing, the Audit Committee has reached a preliminary conclusion that incorrect measurement dates were used for financial accounting purposes for stock option grants in certain prior periods.” While a specific concern regarding Nvidia's stock practices was not revealed by the company, scrutiny over stock options has become increasingly common of late, with more than 60 companies announcing SEC investigations into the topic over the past few months. Most recently, video game companies such as Electronic Arts, Take-Two Interactive, Activision and THQ have all found themselves as targets of investigations and/or lawsuits from shareholders regarding controversial backdating of stock options in such a way that it increases in value compared to current prices when exercised.

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