Iris Energy Stock Drops 21% After Activist Short Seller Raises Concerns About Its HPC Transition

Bitcoin mining company Iris Energy saw its stock drop nearly 21% on Thursday after activist short seller Culper Research released a critical report doubting the company's ability to transition into high-performance computing (HPC) and questioned its valuation.

Activist short seller Culper Research released a critical report on Thursday that drove down shares of Bitcoin (BTC) mining company Iris Energy (NASDAQ:IREN) by nearly 21%.

The report casts doubt on Iris Energy’s ability to pivot into high-performance computing (HPC) and questions the company’s valuation.

Culper compared the company’s ambitions to “trying to win the Monaco Grand Prix in a Toyota Prius,” arguing that Iris Energy’s infrastructure is not suited for HPC and AI applications.

The short seller claims that Iris Energy has spent less than $1 million per megawatt on its current facilities, which is significantly lower than the $10-20 million industry standard for HPC-ready data centers.

The report also raises concerns about Iris Energy’s valuation, suggesting that the company’s shares could be valued 52% to 79% lower than the current price. Culper breaks down the valuation into three parts: existing facilities, undeveloped power and crypto-mining operations, assigning a value of $0 to $100 million to the latter.

The report adds that recent insider selling by co-CEOs Daniel and Will Roberts, as noted by Bloomberg, has also fueled investor concerns. Culper notes that Iris Energy has burned through $716 million in cash since 2020, which was largely used to fund buybacks.

At the time of writing, IREN stock is trading at $11.16, down 13.18% on the day after hitting a session low of $10.36. However, the stock is still up 65% year-to-date.

Culper Research did not immediately respond to a request for comment on the report. We have also reached out to Iris Energy for comment and will update this story if we receive a response.

The post Activist Short Seller Report Pushes Down Iris Energy Stock Nearly 21% appeared first on Benzinga.

The above is the detailed content of Iris Energy Stock Drops 21% After Activist Short Seller Raises Concerns About Its HPC Transition. For more information, please follow other related articles on the PHP Chinese website!