The National Pension Service's (NPS) Nvidia holdings have lost nearly 4 trillion won in market value in just over four months, taking a hit 1.9 times greater than the decline in the stock price alone as the dollar weakened against the Korean won. Nvidia is the NPS's largest overseas stock holding by market value.
The fallout has widened following reports that CEO Jensen Huang admitted to an affair with a woman suspected of having ties to Chinese espionage, followed by allegations of another extramarital relationship. The controversy has fueled speculation about a possible leadership shake-up.
The NPS's direct holdings in Nvidia, Samsung Electronics and SK hynix are worth more than 170 trillion won combined, drawing attention to how the Nvidia controversy could affect the pension fund's semiconductor exposure.
MoneyToday estimated the current value of the NPS's Nvidia holdings at approximately 11.78 trillion won, based on its reported holding of 50,834,621 shares as of the end of June, disclosed in a filing with the U.S.
Securities and Exchange Commission (SEC), and Nvidia's closing price on Nov. 11 (local time). That represents a 25.3 percent, or 3.982 trillion won, decline from the end of June. Of the decrease, 2.0762 trillion won was attributable to the stock price decline and 1.9058 trillion won to the fall in the dollar's value against the won.
The calculation assumes the NPS has maintained the same number of shares since the end of June.
Nvidia closed at $173.73 on the New York Stock Exchange on Nov. 11 (local time), down 6.9 percent from its closing price on Nov. 6, before the allegations surfaced.
The decline reduced the market value of the NPS's Nvidia holdings by approximately $656 million. Applying the Seoul foreign exchange market's closing rates on Nov. 6 and Nov. 11 puts the loss in won at approximately 1.09 trillion won.
After the market closed on Nov. 11, the New York Times reported that Huang had also had an extramarital relationship with Kimberly Powell, a vice president overseeing healthcare who reported directly to him. Nvidia shares subsequently erased their after-hours gains and fell more than 8 percent at one point.
According to pension fund and investment banking industry sources, the NPS also held exchange-traded funds that include Nvidia as of the end of June, including the iShares Core S&P 500 ETF, Invesco MSCI USA ETF and T. Rowe Price Growth Stock ETF.
Taking indirect holdings through these funds into account, the decline in the value of the NPS's direct and indirect exposure to Nvidia is believed to have been even greater. However, the NPS does not disclose real-time positions in individual stocks and funds, so its holdings may have changed since the end of June.
In an email to employees, Huang acknowledged having an affair with Alice Huang, formerly an executive at Singapore-based data center company Megaspeed, whose Chinese name is Huang Le.
The New York Times reported that U.S. intelligence agencies considered her to be linked to China's Ministry of State Security. Nvidia's board has formed an independent committee to investigate the allegations but said it continues to have confidence in Huang.
The NPS is also a major shareholder in Samsung Electronics and SK hynix, which supply Nvidia with high-bandwidth memory (HBM), a key component in AI chips.
According to the latest disclosures, the NPS holds 7.84 percent of Samsung Electronics and 7.32 percent of SK hynix. Based on their closing prices on Nov. 11, the value of the NPS's holdings stood at 94.4794 trillion won in Samsung Electronics and 68.2902 trillion won in SK hynix.
Combined with its Nvidia holdings, valued using the stock's Nov. 11 (local time) closing price, the three positions totaled approximately 174.55 trillion won.
There are concerns that the outcome of the U.S. investigation could also affect South Korea's two leading semiconductor makers. Tighter export restrictions on Nvidia or an actual leadership vacuum could affect negotiations over supply volumes and delivery schedules for next-generation HBM from Samsung Electronics and SK hynix.
However, some in the domestic semiconductor industry argue that the allegations alone are unlikely to trigger immediate changes in HBM orders.
The Wall Street Journal reported that Nvidia's board was preparing to remove Huang as CEO. Although the board said on Nov. 8 that it continued to have confidence in him, further allegations have intensified speculation about a possible change in leadership.
in STOCK
