Hwang In-hoon's personal scandal combined with internal investigation Nvidia (NVDA.US) stock price dives at night

The Zhitong Finance App learned that due to CEO Huang Renxun's personal scandal and the company's launch of an independent investigation, Nvidia (NVDA.US) stock price dived more than 4% on the night of November 8.

According to reports, Huang Renxun sent an internal letter to all employees on November 8 admitting being unfaithful to his wife and apologizing to his family, employees, board of directors, partners, and shareholders. In a letter to employees, Wong In-hoon bluntly stated, “I owe my family and all of you an apology. I'm unfaithful to my wife. My actions hurt her and our kids. There's no excuse for everything I've done. I'm so sorry.”

Hwang In-hoon said that he will take full responsibility and accept all criticism from the outside world, hoping that the family can slowly heal. Facing his colleagues, board of directors, partners, and all shareholders, he confessed that “everyone deserves a better performance”, admits that he has failed this heavy responsibility, and promised to invest all his energy into Nvidia's business in the future and do his best to regain everyone's trust.

There are reports that the woman involved in Hwang In-hoon's extramarital affair is an asset of a foreign intelligence agency. Nvidia's board of directors announced on the same day that a special committee composed of independent directors has been set up to launch an independent investigation with the assistance of external independent legal advisers to find out whether Hwang In-hoon has become the target of foreign intelligence agencies' actions. The board of directors said that there is currently no reason to believe that national security interests or Nvidia's core trade secrets have been compromised, but the special investigation will still check all available information one by one.

In the letter, Hwang In-hoon also responded to national security-related concerns in recent news reports, saying that he fully supports the independent investigation initiated by the board of directors, will fully cooperate with all inspections, and emphasized that he loves the country and company, has always been committed to protecting Nvidia's core interests, and is proud to be an American.

John Rizzo, head of public policy communications at Nvidia, made it clear that the relevant news “will not slow down Nvidia's development pace at all” and that Hwang In-hoon will continue to serve as CEO and advance all established businesses without interruption. Hwang In-hoon will perform all duties as CEO normally until the final conclusion of the entire independent investigation is reached.

Some analysts pointed out that at present, Wall Street's overall judgment on Nvidia has not changed, the company's fundamentals have not changed, and the third quarter earnings report will still be released as scheduled. However, there are also quite a few securities analysts who believe that Nvidia's stock price is bound to be affected in the short term due to the personal scandals of key figures compounded by the uncertainty of independent investigations.

Chris Weston, head of research at Pepperstone broker in Melbourne, Australia, said: “The market is probably telling you now that this incident is completely unbeneficial to stock prices, especially during a period where the market has a lot of speculation about the prospects for data center construction.” However, he doesn't think Hwang In-hoon, who he calls the “Godfather of AI,” will be replaced. “If we really think he will step down... then the stock price will drop — to be honest, it would be a complete bloodwash”.

After the storm unraveled, US President Trump, Tesla (TSLA.US), and SpaceX (SPCX.US) CEO Musk all spoke out about the incident. Among them, Trump publicly expressed his support for Hwang In-hoon, saying that he is a “great and talented person”. He respects and likes him very much, hopes that everything is fine with him, and believes that Hwang In-hoon should continue to lead the company. When asked if Wong In-hoon should continue to be the White House technology adviser, Trump responded that he has always believed that Hwang In-hoon is decent and straightforward, and that he should continue to use him as an adviser unless evidence to the contrary is found. Furthermore, according to some sources, Trump may invite Hwang In-hoon to accompany him during his visit to Asia at the end of November.

Musk also retweeted Sequoia Capital partner Shawn Maguire's five comments on Hwang In-hoon — including “Hwang In-hoon is one of the most outstanding entrepreneurs of his generation,” “He did an extremely stupid thing,” “It's bad for America,” “I don't think he's bad,” and “he's indispensable for leading the US AI industry” — and added a brief response: “I agree.”

Bill Ackman, a billionaire investor and founder of Pershing Square Capital Management, said on social networking platform X that Hwang In-hoon is an “amazing person,” but if “this really isn't just an extramarital affair, then obviously it's a real problem.” He added: “I hope this is just an ordinary extramarital affair and not something that poses a threat to our national security.”

Some analysts said that if the investigation or internal review continues for a long time, it may delay Nvidia's investment decisions or product launches and have a wider impact on the semiconductor industry as a whole.

Ryu Young-ho, a senior analyst at NH Investment & Securities, said that Nvidia's competitors, including AMD (AMD.US), may receive more market attention in the short term, which may also make Samsung, which maintains a close business relationship with AMD, become the focus of the market. However, he added that Nvidia's products are difficult to replace, so the possible impact of the incident is limited.