Business & Finance
Nvidia's stock slide could reach 401(k) plans through index funds
Nvidia's value fell more than $550 billion in a week after CEO Jensen Huang resigned, while a separate report says a director sold about $946 million in stock earlier.
The short version
- Nvidia's shares fell after revelations about CEO Jensen Huang, who then resigned Thursday, and the company's value dropped more than $550 billion since Nov. 6.[CBS News]
- Savers whose 401(k) plans hold index funds may own Nvidia indirectly, since about 97% of plans offer such funds and Nvidia is about 6% of the S&P 500.[CBS News]
- The S&P 500 still gained 2.9% through Thursday's close, and an estimated 3.8% excluding Nvidia.[CBS News]
- A separate Hacker News report says director Mark Stevens sold about $946 million in Nvidia stock before Huang resigned, without a prearranged trading plan.[Hacker News]
Key facts
- Nvidia's value declined by more than $550 billion, about 13%, in one week starting Nov. 6.[CBS News]
- CEO Jensen Huang resigned on Thursday after revelations of an extramarital relationship with a suspected Chinese spy.[CBS News]
- About 97% of retirement plans offer index funds, up from 79% in 2006, according to March research from the Investment Company Institute and ISS Market Intelligence.[CBS News]
- Nvidia represents about 6% of the S&P 500, the second-largest component after Apple, according to Yahoo Finance.[CBS News]
- The S&P 500 rose 2.9% for the week through Thursday's close and would have gained an estimated 3.8% excluding Nvidia.[CBS News]
- Nvidia board director Mark Stevens sold about $946 million in company stock in the months leading up to Huang's resignation, according to Hacker News reporting.[Hacker News]
- SEC filings show Stevens sold roughly 4.2 million shares in three batches between Aug. 31 and Sept. 18.[Hacker News]
- Stevens reportedly did not have a prearranged trading plan for the stock sales.[Hacker News]
What remains uncertain
- The sources do not establish whether Stevens's stock sales had any bearing on Huang's resignation.[Hacker News]
- The sources do not say how many 401(k) participants hold Nvidia shares or how much individual accounts would be affected.[CBS News]
Sources
Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.