Nvidia next to review stock option practices
The list of companies that are reviewing stock option grants continues to grow. Next in line is Nvidia which announced during its second quarter earnings conference call that "the Audit Committee of the Board of Directors is conducting a voluntary review of the Company's stock option practices covering the time from the Company's initial public offering in 1999 through the current fiscal year."
As a result, the company did not provide a complete quarter report and said that it won't be able to file the document in time provided by the Securities and Exchange Commission (SEC). Investors reacted immediately and sent the stock down almost 9% in after hour trading. Early evening, the stock was trading at $22.00, down from $24.16 at market close. The drop translates into a loss of about $767 million in market capitalization for Nvidia.
Despite the unexpected news, Nvidia highlighted a record quarter result, at least in terms of revenues. According to chief executive Jen-Hsun Huang, the company reported sales of $687.5 million during Q2, up 20% from Q2 of 2005 when the company achieved sales of $574.8 million. The company did not release data on earnings, expenses and margins.
Huang said that Nvidia saw "strong performance" in desktop and notebook GPU, as well as in MCP and handheld markets. Desktop GPU shipments increased 13% over last year, while notebook GPU shipments jumped 80% in the performance segment and 172% in the mainstream segment. According to Huang, Nvidia has shipped more than 20 million GPUs supporting SLI to date.
The executive also commented briefly on AMD's acquisition of ATI and said that Nvidia's "unique position" as only platform and GPU company supporting Intel and AMD will open "tremendous growth opportunities in all kinds of digital devices."