Retail investors snap up $111M in Nvidia shares in 30 minutes as stock plunges on Jensen Huang's exit

As Nvidia's share price plunged following the shock resignation of former CEO Jensen Huang amid an extramarital affair scandal, retail investors in the United States moved quickly to buy the dip, seeking to capitalize on what some called a bargain-sale opportunity.

Some investors placed bets on a price rebound through high-risk instruments, including leveraged ETFs and short-term call options.

According to the Wall Street Journal, retail investors purchased $111 million worth of Nvidia shares in the 30 minutes after New York markets opened on Thursday (local time), Yonhap reported.

That marked the largest retail buying volume ever recorded for Nvidia in the first 30 minutes of trading.

Nvidia opened Thursday down 13.08 percent from the previous session at $151.00. The stock fell more than 14 percent at one point during trading, but sustained bargain-hunting trimmed the losses, and shares closed down 4.34 percent at $166.19.

Signs of retail investors betting on a Nvidia rebound had emerged even before the resignation was announced.

According to market flow analytics firm Vanda Research, $42.5 million flowed into six leveraged ETFs tracking twice the daily movement of Nvidia's share price between Monday and Wednesday.

By contrast, inverse funds betting on a decline in Nvidia's share price saw no net inflows.

This is seen as a sign that expectations are running high among retail investors that Nvidia's share price will rebound.

South Korean retail investors who trade US stocks were also closely watching Nvidia's moves.

"I fundamentally believe the company's underlying structure is solid, so I don't think it will keep falling," said a 36-year-old office worker who gave only the surname Lee. "If the company handles this situation well, it could actually earn high marks for crisis management, and I cautiously predict the share price will climb as a result. Right now, this could be a kind of bargain sale."

Meanwhile, Nvidia's market capitalization briefly shed more than $600 billion during Thursday's session, Yonhap reported.

Nvidia's board said Huang had immediately stepped down as president, CEO and director. Chief Financial Officer Colette Kress will serve as interim CEO while the board searches for a permanent successor from both inside and outside the company.

Huang has retained a major US law firm and is mounting a personal legal defense, according to sources familiar with the matter.

According to The New York Times, Huang has hired law firm Paul Weiss as his legal representative.

Attorneys Melinda Haag and Walter Brown of the firm are involved in Huang's legal response, sources said.

The specific scope of the firm's work has not been confirmed. Both attorneys have previously represented corporate executives in government investigations and internal corporate probes.

Huang is facing pressure from the FBI and Congress to cooperate with investigations into allegations of ties to Chinese espionage, and also confronts a class-action lawsuit from investors.

Nvidia shareholders filed a class-action suit against Huang and the company on Monday, alleging that they misled investors by failing to properly disclose his relationship with Alice Huang and related national security risks.

The House Foreign Affairs Committee, the Select Committee on the Chinese Communist Party, and the House Intelligence Committee have demanded that Huang appear for a closed-door joint briefing.