Jensen Huang falls out of top 10 richest amid spy probe

Nvidia ↗ 4.39% CEO Jensen Huang has dropped out of the list of the world's 10 richest people. The company's shares fell for two straight sessions after its board opened an investigation into his affair with a woman U.S. intelligence believes is a Chinese spy. Forbes reported that Huang's net worth fell $7.4 billion to $154.7 billion within the first half-hour of trading on Monday, November 9. That moved him from eighth to 10th place, below Berkshire Hathaway's Warren Buffett and Oracle's Larry Ellison.forbes.com

By midday Tuesday he had lost another $9.8 billion, bringing his estimated fortune to $145.6 billion and his rank to No. 12, according to Forbes. That puts him behind Spanish businessman Amancio Ortega and Walmart's Rob Walton and family.forbes.com

Two days of selling

Nvidia shares closed down about 4.3% on Monday after falling as much as 8.8% shortly after the open, CNN reported. They sank about 6% more on Tuesday. Over the two sessions the stock lost roughly 10%, making it the second-worst performer in the S&P 500 ↗ 1.44% and leaving it at its lowest close since March 30, Bloomberg reported. Reuters estimated that Nvidia shed about $430 billion in market value across the two days. The shares bounced about 3% at Wednesday's open as the broader market rallied, according to Bloomberg.cnbc.com+3

The investigation

The selloff began after Huang told employees on Sunday that he had been "unfaithful" to his wife and had "fallen short" of his responsibilities as CEO. He reportedly had an affair with Alice Huang, an executive at Megaspeed, a Singapore-based Nvidia customer. The board said a committee of independent directors and outside counsel would investigate, while adding it had "no reason to believe that either national security or NVIDIA secrets were compromised," AP reported. The directors have hired Wachtell Lipton partner Joon Kim, a former acting U.S. Attorney for the Southern District of New York, to lead the review, according to Reuters.apnews.com+2

President Donald Trump said the FBI is also looking into the matter. He added that he did not think Huang had reason to worry, AP reported. China's Foreign Ministry has dismissed the spying allegations.apnews.com+1

Mounting pressure

House Foreign Affairs Committee Chair Brian Mast said he is prepared to subpoena Huang if he does not respond by Wednesday to a request for a closed-door briefing, ABC News reported. A shareholder has also filed a proposed class-action lawsuit. It accuses Nvidia and Huang of misleading investors in how they responded to earlier media reports about the relationship, AP reported.standardspeaker.com+1

On Wall Street, Dan Ives of Yorkville Ives & Co wrote that investor chatter assigns "roughly a 15% chance he is removed as CEO." He added that a board investigation that "could take 4 weeks to 6 weeks" would "create a clear overhang on the stock," CNBC reported.cnbc.com