"Christ. Fine. So over the weekend, a strange Substack post from what appears to be a CEO of a pet relocation company went very viral. This post - which to be clear, is bullshit - alleges that Nvidia is engaged in "may become the largest accounting fraud in technology history." That's a load-bearing "may," in the sense that there's no credible reason to believe Nvidia is engaged in fraud at all."
"Apparently this spooked Nvidia, which - as first reported by Barron's - has sent a note to analysts clarifying that it is not, in fact, Enron. That note, which The Verge has seen, addresses the specific allegations in that Substack, as well as claims by famed short-seller Michael Burry that Nvidia's accounting of stock-based compensation didn't make sense. (According to Nvidia, Burry seems to have incorrectly added taxes on restricted stock units to get his numbers.)"
"Now, naturally, this caught my attention because I've recently used Enron as an analogy for what Nvidia is up to with the neocloud companies it funds: "There is no neocloud that exists without [Nvidia CEO] Jensen [Huang]," says Saari. That makes neoclouds, in effect, extensions of Nvidia, he says. And none of them make money, so to expand, t"
A viral Substack post, likely from a pet-relocation-company CEO, alleged Nvidia "may become the largest accounting fraud in technology history." Nvidia sent analysts a note denying Enron-style fraud and addressing those allegations as well as Michael Burry's claims about stock-based compensation accounting. Nvidia stated Burry appears to have incorrectly added taxes on restricted stock units when calculating numbers. The viral claim was described as baseless. An Enron analogy was invoked comparing Nvidia's relationship with neocloud companies, suggesting neoclouds effectively extend Nvidia and that many fail to make money.
Read at The Verge
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