IREN collapses after short seller calls miner ‘Prius at Grand Prix’
Bitcoin mining firm IREN — formerly Iris Energy — fell 24 percent on the Nasdaq after a report from short-seller Culper Research accused the company of being “wildly overvalued.”
Culper – who announced his short-selling position on IREN – accused the company of making a “big play” on its plans for high-performance computing by investing far less than required.
“IREN talks a big game about its HPC plans, but seems completely uninterested in doing what it takes to compete in the space,” Culper said in a July 11 short sales report.
Culper said the company spent less than $1 million per megawatt to build the existing center and would build a similar HPC center for the same price.
“Meanwhile, major operators, analysts and experts confirm that the actual cost of developing an HPC-ready data center is $10 to $20 million per MW,” he said.
“To match, IREN said he was going to win the Monaco Grand Prix, but he just arrived at the track in a Toyota Prius.”
The report also accused IREN of being “wildly overvalued” and should instead be 52-79 percent cheaper.
The research firm made the case by comparing IREN's extremely high enterprise value on a hash rate per MW basis to other publicly traded miners.
“We offer crypto mining jobs to companies worth $0 to $100 million, which we feel is generous again given that the business has historically burned through cash,” Culper said.
Culper said the economics of mining “fell further” in the last halving event and so he can't see IREN improving its position anytime soon.
Culper also noted that IREN has failed to deliver on its promises on several occasions, one of which was to reach 10 exhashes per second by April 2023, but in reality it had only reached 5.5 EH/s at that point.
The researchers pointed to insider sales of shares from the company's CEOs, brothers Daniel and Will Roberts, starting in February 2024.
Cointelegraph reached out to IREN but did not receive an immediate response.
Related: Mining company Terawolf pays off outstanding debt early.
This isn't the first time Culper has targeted a Bitcoin miner.
Culper wrote a brief vendor report on CleanSpark in January 2021, but CleanSpark hit back a week later, saying many of the allegations were “false,” and announced at the time that it would investigate the sources of the misrepresentations and the identities of the people behind them. Destroyer.
IREN shares fell 24.5% to $10.36 in after-hours trading on July 11, but partially recovered to $11.20, according to Google Finance data.
The company's market value now stands at $2.09 billion.
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