b'First, the court held that plaintiffs falsity allegations relied entirely on a purported experts analysis thatFinally, the court rejected plaintiffs motive NVIDIA underreported revenues from crypto-mining by approximately $1.126 billion, because Plaintiffs failedargument that the CEOs sale of 111,000 to describe [the experts] assumptions and analysisshares during the class period supported with sufficient particularity to establish a probability that its conclusions are reliable. In particular, the courtscienter because it was not suspicious under focused on the experts key assumption that NVIDIAsthe circumstances. The court explained that, crypto-mining market share mirrored its gaming market sharesomething critical to its analysisbut failedalthough the sale was not pursuant to a 10b5-1 to provide the alleged source for this assumption.plan like most of the CEOs stock sales, the Indeed, the court noted that this assumption was clouded by allegations in the amended complaint thatsale was insignificant (less than half a percent) NVIDIAs primary competitor, Advanced Micro Devices,given the overall amount of stock the CEO Inc. (AMD), was the preferred provider of GPUs by crypto-minersmeaning NVIDIA had a smaller shareowned, and he sold the stock well before the of this marketbut that the amended complaint lackedpeak stock price during the class period. similar allegations that gamers or the gaming industry generally preferred AMD GPUs.Second, the court concluded that plaintiffs failed toAlthough the court determined that plaintiffs failed plead sufficient facts alleging scienter because [t] to plead scienter and falsity, it held that plaintiffs aking all the allegations provided by the confidentialsufficiently pled loss causation. Notwithstanding its witnesses together, they fail to plausibly establishearlier conclusion that falsity was not pled, the court that any particular statement by any Individualfound that Defendants alleged misstatements were Defendant was knowingly or recklessly false orthe proximate cause of Plaintiffs loss. The court misleading when made. The court reasoned thatexplained that plaintiffs successfully tied NVIDIAs none of the alleged confidential witnesses wereAugust and November 2018 disclosures puncturing alleged to have sufficient contact with the individualthe allegedly misleading impressions drawn from the defendants or personal knowledge sufficient to showchallenged statements to their loss by alleging that the that any individual defendant knew of informationmarket was concerned about whether crypto-mining that allegedly contradicted the statements attributedwas behind the surge in NVIDIAs gaming revenues and to them. The court further held that plaintiffs failedthat defendants assurances caused the stock to trade to meet the heavy burden necessary to rely on theat artificially high prices.core operations theory for scienterthat is, becausePlaintiffs filed an amended complaint on May 13, the alleged misstatements concerned NVIDIAs core2020, which defendants again moved to dismiss and business, the individual defendants essentially mustthe court granted, with prejudice. The court focused have known that they were false when made. Theits analysis on plaintiffs failure to plead scienter, court reasoned that, contrary to plaintiffs contention,without addressing falsity. It held, again, that the the challenged statements quantifying NVIDIAsfour confidential witness allegations reiterated in the cryptocurrency-related gaming sales were not specificamended complaint and new allegations from a fifth admissionsof detailed involvement in the minutia ofconfidential witness fail[ed] to raise a strong inference NVIDIAs operations required for the core operationsof scienter largely because Plaintiffs do not adequately theory to prevail. And the conclusory allegationtie the specific contents of any of these data sources that gaming is NVIDIAs core business was notto particular statements so as to plausibly show that enough. Finally, the court rejected plaintiffs motivethe Defendant who made each specified statement argument that the CEOs sale of 111,000 shares duringknowingly or recklessly spoke falsely. The court also the class period supported scienter because it wasreiterated its prior holding that the core operations not suspicious under the circumstances. The courttheory was inapplicable here, based on the same explained that, although the sale was not pursuant to arationale as the prior dismissal order.10b5-1 plan like most of the CEOs stock sales, the sale was insignificant (less than half a percent) given theJudgment was entered for defendants on overall amount of stock the CEO owned, and he soldMarch 2, 2021. Plaintiffs appealed to the U.S. Court the stock well before the peak stock price during theof Appeals for the Ninth Circuit on March 30, 2021 class period. (Case No. 21-15604).16'