Nvidia perpetual futures on Binance fell more than 8% below the US close late Wednesday after reports emerged that the chipmaker's board was looking to remove CEO Jensen Huang.
The board's decision remains unconfirmed, but crypto venues gave traders their first opportunity to react to the news because Nasdaq was already closed.
Traders reprice NVDAUSDT
According to reports from the New York Times and Bloomberg, Nvidia's board is preparing to remove Huang and has engaged an outside firm to identify possible replacements, while also considering appointing an interim CEO.
The reports cite revelations that Huang had at least two extramarital affairs, one with someone working at the company and another with an alleged Chinese spy, Alice Huang. On Sunday, the Nvidia co-founder sent an email to employees apologizing for his conduct, and the board subsequently opened an independent investigation into the matter.
Separately, shareholder Mark Kistenmacher has filed a lawsuit claiming that Nvidia and Huang misled investors about the latter's relationship with the alleged Chinese operative, a former executive of Megaspeed International, a company that had reportedly bought more than $4.8 billion of Nvidia chips over the past two years.
According to Binance Research, reports that the Nvidia board intended to remove Huang triggered an immediate repricing in the NVDAUSDT perpetual futures market, well after US equities had closed.
Nvidia ended that session at about $173.73, a nearly 3% improvement on where it had started the day. After the leadership news broke, the contract on Binance dropped by about 8.8% below that level, touching an index level of 92.6 against a previous close set at 100.
Heavy post-close volume
Trading activity was substantial, with NVDAUSDT recording $2 billion in 24-hour volume. Per the Binance report, about half of that came after the US cash session had ended, suggesting traders were actively responding to the reports rather than waiting for Nvidia shares to resume regular trading today.
Analysts argue against removing Huang
Not everyone thinks removing Huang is a good idea. Market commentators at The Kobeissi Letter argued that the company could be hurt if it tries to replace an outperforming executive without a clear successor.
"Do not fire Jensen Huang," they wrote in a post on X. "There is no clear replacement for Jensen Huang. We are confident that his departure would ultimately be a net negative for Nvidia, its shareholders, and the AI Revolution."
Instead, they urged the board to conduct a thorough investigation and consult with shareholders "with a strong emphasis on the latter." They also pointed to Nvidia's 35% dip in about 26 trading days, half of that coming as a result of the scandal, and said the market had priced in the removal of Huang by approximately 80%.
"Why take an action with massive downside potential when the market has already priced in much of that risk?" asked Kobeissi.
In their opinion, while there is some downside to keeping Huang, the potential upside could be "tremendous."
