Nvidia's stock fell 5.47% on Tuesday after a 4% drop on Monday, a combined loss of about 9.5% over two days. The article reports that the company had little news during that period.
CEO Jensen Huang has reportedly admitted to an extramarital affair with Alice Huang, whom U.S. intelligence agencies believe was spying for China. The board hired the law firm Wachtell, Lipton, Rosen & Katz to conduct an internal investigation. The board said in a Sunday statement that Nvidia "has no reason to believe that either national security or NVIDIA secrets were compromised."
Two corporate governance professors, Ann Lipton of the University of Colorado and Todd Henderson of the University of Chicago, said there is no clear precedent for a CEO involved in a suspected honeypot case. Lipton said she knows of affair and harassment cases but none that also involved potential national security compromises. Henderson said the outcome depends on facts that are not yet known, including what, if anything, Alice Huang obtained from Jensen Huang.
Lipton outlined three possible lines of inquiry: whether the law was broken, whether Huang violated Nvidia's internal policies, and whether the board was mis