alt Hacker NewsI don't follow this logic. Why is an affair with a customer grounds for announcing a resignation that caused an instant 10% stock price drop?
Replies
He didn’t come clean on his own accord - he was faced with irrefutable evidence and admitted it.
How can you trust anything he says after this?
Why should regulators or other customers believe any promises made by him?
His credibility is shot - the day to day stock prices changes are irrelevant.
Because it potentially gives the affair partner a lever to bypass internal company controls.
Relationships and stock price are built on trust. An affair, a relationship with a customer/subordinate, and an attempted cover-up are all breaches of that trust.
> Why is an affair with a customer grounds for announcing a resignation that caused an instant 10% stock price drop?
OP said
>A CEO admitting to an affair with a customer *after previously denying it*, seems like a sufficient reason for removal
It's not the crime. It's the cover up.
In this case Jensen either 1) lied to the board about the affair, 2) directed the Nvidia PR to publish a materially false statement about it, or 3) both.
From a company governance standpoint it's incredibly hard to trust Jensen when he's either lying to you, using the company to protect his personal life, or (again) both.
Admitting to the affair with a customer is a nothingburger. Directing the company to release a false statement about it, and that customer turns out to be a Chinese asset if a BIG fucking deal.
Lying about it served no one's interest but Jensen's, and ended up hurting the company significantly.
Because the customer in question raises questions of the CEO's judgement, plus the possibility of knowledge that the target was violating sanctions. We don't know. That's why it's a bad situation for the stock.