Nvidia Slips on Restatement
Nvidia's (NVDA) stock slipped more than 5% Tuesday after the company said it would restate three years worth of financial statements due to improperly recorded stock option grants.
The graphics chipmaker said the restatements will result in noncash charges of "less than $150 million for stock-based compensation expense, net of related tax effects," which will have the effect of decreasing report net income or increasing reported loss from operations during those periods.
All financial statements since its 1999 initial public offering should no longer be relied upon, the company said.
Nvidia said its audit committee has concluded a forensic review of option grants, launched in June, which found discrepancies in the measurement dates of certain stock options. The committee is now working with management to finalize the financial impact of using incorrect measurement dates.Shares of Nvidia slid 5.3%, or $1.86, to $33.01 in midday trading Tuesday. Santa Clara, Calif.-based Nvidia is among more than 100 companies under scrutiny for the practice of backdating stock options. Nvidia said its internal investigation determined that there are no concerns with respect to the integrity of current management, but noted that the company's auditors have not completed their review of the findings of the investigation. Nvidia plans to restate its financial statements for the fiscal years 2004 through 2006, along with selected financial statements for earlier years as well as for the first quarter of fiscal 2007. The restatements are not expected to have a material impact on Nvidia's operating results for any period in the current fiscal 2007. Nvidia said it intends to file the restated financial statements, as well as its delinquent fiscal 2007 second-quarter earnings report, as soon as practicable.
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