CEO scandals cost the shares 6% in a month. Nvidia lost twice that in two days

On Monday 9 November, the first trading day after Nvidia's board said it would investigate reports that its chief executive, Jensen Huang, had been the target of a foreign intelligence effort, the company's shares fell 4% while the S&P 500 rose 2%. By the close on Tuesday they had lost 12% against the market, and Mr Huang resigned two days later. A drop of that size, at a company worth trillions, looks like a verdict. We wanted to know how unusual it is, and what the record says about what comes next.

We collected every scandal we could find about the sitting chief executive of a large company listed in America since 2000: 47 cases, from affairs and harassment to accounting fraud, each dated by the first news report and fixed before we looked at any share price. For the 36 we could price, we measured each company's shares against the S&P 500 from the day the news broke.

The first two days sort the cases into three groups of roughly equal size. In 12 of the 35 earlier cases the shares fell 5% or more against the market: Mark Hurd's departure from Hewlett-Packard in 2010 cost 9%, the 2012 report that Walmart's chief had been told of bribery in Mexico cost 7%. In another 12 they slipped by less than 5%: Steve Easterbrook's departure from McDonald's in 2019 and Brian Krzanich's from Intel in 2018 each cost about 1%. And in 11 the shares rose, by up to 3%. The middle case is down 1.3%, but the middle case is not the story; the spread is. The average fall is 3.6%.

The damage comes slowly

Most of the cost comes after the first two days. A month after the news, 20 of the 35 companies were 5% or more behind the market and the typical one was 6% behind: a little more when the accusation was fraud (9%) than when it was personal conduct (6%). A year on, the typical company was still 7% behind, though by then the spread is wide (the middle half of cases run from 24% behind to 11% ahead) and a year brings plenty of other news. A 2018 study of executives' personal indiscretions by Cline, Walkling and Yore found losses of a similar order for chief executives, about 4%. There was no sign, in the week before the news, of shares sliding on a leak.

Nvidia's fall was the opposite: almost all of it came at once. Its 12% in two days is the fifth-largest of the 36 cases. Measured against other chipmakers rather than the whole market, it lost 14%. Its shares had also slid the week before, but so had the rest of the industry; against other chipmakers there was no fall before the news.

The ones that fall hardest

Of the 22 earlier personal-conduct scandals, only two hit harder than Nvidia's: Steve Wynn's at Wynn Resorts in 2018 (20%) and Richard Liu's at JD.com in 2018 (16%). Both men founded their companies, as Mr Huang did. The third-largest fall of all, Carvana's 14% in 2025 on a fraud accusation, was at a company run by its founder too.

That is a pattern, not a law. Across all the cases, scandals at founder-led companies cost a median of 7% in two days; at companies run by hired managers, 1%. With only eight founder cases, Elon Musk's Tesla among them three times, we treat this as suggestive. It fits a simple reading: when the company is the person, investors price the person.

Size makes no difference, except in dollars

The companies on the list range from $5bn to $750bn in value before the news, measured from the share count in each one's last filing. Size does not predict the fall: the smaller half (under $49bn) lost a median 2% in two days, the larger half 1%, and the rank correlation between size and the fall is close to zero. The largest third had a smaller gap a month on (3%, against 8% for the rest), which is what you would expect if a $200bn company's value rests less on one person, but 12 cases each way is too few to say.

In dollars it is a different story. Nvidia was worth about $4.5trn on the Friday before the news. Twelve per cent of that is about $530bn: eleven times the largest earlier loss on the list, Tesla's $49bn in May 2022, and about four times what all 35 earlier scandals cost together. The sum Nvidia's shares lost against the market in two days is more than 33 of the 35 earlier companies were worth in total.

How long it takes

Among the 12 companies the market punished at once, half had caught up with it again within about four months. A quarter took more than a year. A quarter had not caught up three years later: Hewlett-Packard after Mr Hurd, Fannie Mae after its 2004 accounting scandal and James Hardie in 2022.

That count leaves something out. Eleven companies in our list no longer trade and could not be priced. Six were later sold or merged, among them Activision Blizzard, Seagen and Yahoo. Four failed: Bear Stearns within months, in the financial crisis, and Nortel and Chesapeake Energy, twice, years later. They could tilt the picture either way: the failures would make recovery look slower, but takeovers usually come at a premium.

Nvidia's record so far runs to five trading days. On this history, the odds are about even that it is back level with the market by the spring, and one in four that it is still behind in three years. We will check in May 2027 and again next November.