Kobeissi Letter publicly calls on NVIDIA's board of directors not to replace Jensen Huang, stating that there is currently no clear successor, and his departure will harm the company as well as the broader artificial intelligence industry.
This research institution pointed out that a study of 187 instances of forced CEO departures from companies in the S&P 1500 found that replacing highly performing leaders led to weaker long-term stock returns. The institution stated that Jensen Huang fits this characteristic.
Kobeissi calls on directors to avoid hasty decisions, to conduct a comprehensive investigation, and to hold a special general meeting of shareholders to seek shareholder opinions through a consultative vote regarding the future of Jensen Huang.
The institution also pointed out that NVIDIA's stock price has fallen by 35% over 26 trading days, with nearly half of that decline being related to this scandal, and estimated that the market's expectations for Jensen Huang's removal have already been factored in by about 80%. The institution believes that the downside risks of keeping Jensen Huang in his position are limited, but there is significant potential for upside.
