Nvidia tumbles 4.4% as Jensen Huang resigns as CEO

What happened to Nvidia's stock on Thursday?

Nvidia (Nasdaq: NVDA) shares tumbled 4.4% on Thursday after Jensen Huang resigned as chief executive. The stock closed at $166.15, down from $173.73 the day before.

Why it matters: The company lost $180 billion in market value, leaving it worth about $4 trillion. Shares worth $120 billion changed hands during the session. Chief financial officer Colette Kress was named interim CEO.

By the numbers: Broad funds moved far less. The S&P 500 fell 0.4%, and the Nasdaq-100 fell 0.3%. On $1,000 in an S&P 500 fund, Thursday cost $4. A Nasdaq-100 fund lost $3 per $1,000. The 10-year Treasury yield also jumped 12 basis points the same day.

Why is a short seller's report back in focus?

Culper Research, a short seller, published a report on Nvidia in May. A short seller profits when a stock falls. The report said Nvidia "has a significant China problem."

Many investors ignored the warning at the time. Because Nvidia ranks among the world's biggest companies, it avoided the quick drop some short-report targets suffer. The stock rose the day the report came out and hit a new 52-week high, its highest price in the past year.

Huang resigned under political and regulatory scrutiny tied to China. That put the report back in the spotlight. A Wall Street Journal report profiled Culper founder Christian Lamarco and described how many investors missed or ignored the Nvidia report.

What did Culper allege about Nvidia and China?

After a round of U.S. trade restrictions, Nvidia said its China compute business had dried up. Culper alleged that Chinese demand still drove a significant share of Nvidia's compute revenue.

The report alleged that this demand flowed through Southeast Asian middlemen, including Singapore-based Megaspeed International. It also said Huang had kept an "uncomfortably close" relationship with Megaspeed's leadership.

Late last month, scrutiny turned to Alice Huang, a senior Megaspeed executive. Her Megaspeed ties sent attention back to Culper's report. These remain allegations from a firm that profits when Nvidia's stock falls.

How far has Nvidia fallen from its high?

The stock has tumbled 30.6% from its 52-week high of $239.24. For people who own the shares directly, that slide lands in full, with no other holdings to offset it.

What could come next for Nvidia?

What’s next: Nvidia is scheduled to report quarterly results on Nov. 17, with Kress running the company on an interim basis.

The open question is whether Culper's China allegations hold up, and how the company responds to them. Those results, and anything Kress says alongside them, could show where Nvidia's China business stands.