Bitcoin

April

when

Bitcoin mining firm IREN, previously known as Iris Energy, experienced a 24% drop on the Nasdaq following a critical report by short-seller firm Culper Research. The report accused IREN of being "wildly overvalued" and asserted that the company is not investing enough to remain competitive in the AI industry.
Culper — which <a href="https://img1.wsimg.com/blobby/go/cc91fda7-4669-4d1b-81ce-a0b8d77f25ab/downloads/Culper_IREN_7-11-24.pdf?ver=1720711055685" target="_blank" rel="noopener nofollow">disclosed</a> its short-selling position on IREN — accused the company of talking “big game” about its high-performance computing plans while investing far less than what is required.
“IREN talks a big game of its HPC plans but ultimately seems entirely disinterested in actually doing what it takes to compete in the space,” claimed Culper in a July 11 short-seller report.
Culper claims the firm has spent less than $1 million per megawatt to build its existing center and told investors it will complete a similar HPC center for around the same price.
“Meanwhile, leading operators, analysts, and experts all confirm that the true cost to develop an HPC-ready data center is ~$10 to $20 million per MW,” it noted.
<blockquote data-ct-non-breakable="true">
 “To analogize, IREN claims that it’s set to win the Monaco Grand Prix, but just arrived to the track in a Toyota Prius.”
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 <img src="https://s3.cointelegraph.com/uploads/2024-07/369d39da-ece0-43c3-8173-d0023f4a1029.png" alt="IREN tumbles after short seller calls miner ‘Prius at the Grand Prix’">
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 Excerpt from Culper Research’s report on IREN. Source: Culper Research
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The report also accused IREN as being “wildly overvalued” and should instead be between 52-79% cheaper. 
The research firm made its case by highlighting IREN’s extremely high enterprise value relative <a href="https://cointelegraph.com/explained/what-is-bitcoin-hash-rate-and-why-does-it-matter">to hashrate</a> on a MW basis compared to other publicly-traded miners.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-07/1a0d9626-6b81-4335-bdbd-a4e8e2a2aac8.png" alt="IREN tumbles after short seller calls miner ‘Prius at the Grand Prix’">
 <figcaption style="text-align: center;">
 Enterprise value and hash rates of several public Bitcoin miners. Source: Culper Research
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“We ascribe $0 to $100 million in value to the Company’s crypto mining operations, which again we feel is generous given that the business has historically burned cash,” Culper said.
Culper said the <a href="https://cointelegraph.com/learn/how-to-mine-bitcoin-a-beginners-guide-to-mine-btc">last halving event</a> “further decimated” <a href="https://cointelegraph.com/news/the-economics-of-cryptocurrency-mining-costs-revenues-and-market-trends">miner economics</a> and therefore cant see IREN improving its position anytime soon.
Culper also noted that IREN has failed to fulfill its promises on several occasions, including one that it would <a href="https://cointelegraph.com/news/iris-energy-to-double-hash-rate-in-2024">attain a hashrate</a> of 10 exahashes per second by April 2023, when in reality, it only <a href="https://cointelegraph.com/news/australia-based-crypto-miner-doubles-hash-rate-after-energizing-canadian-rigs">reached 5.5 EH/s</a> by that point.
The researchers also pointed to <a href="https://cointelegraph.com/news/crypto-exchanges-tackle-insider-trading-after-recent-convictions">insider selling of shares</a> from the firm’s co-CEOs, brothers Daniel and Will Roberts, since February 2024.
Cointelegraph reached out to IREN but didn’t receive an immediate response.
Related: <a href="https://cointelegraph.com/news/mining-company-terawulf-pays-outstanding-debt-early">Mining company TeraWulf pays off outstanding debt early</a>
It's not the first time Culper has targeted a Bitcoin miner.&nbsp;
Culper <a href="https://x.com/CulperResearch/status/1349797488199348225" target="_blank" rel="noopener nofollow">wrote</a> a short seller report on CleanSpark in January 2021, but CleanSpark hit back a week later, <a href="https://www.prnewswire.com/news-releases/cleanspark-investigating-short-seller-culper-research-301212791.html" target="_blank" rel="noopener nofollow">claiming</a> much of the accusations made were “false” and announced at the time it would be investigating the sources of the misrepresentations and the identity of those behind Culper.&nbsp;
IREN shares fell 24.5% to $10.36 on July 11 before partially recovering to $11.20 when trading hours closed, Google Finance data <a href="https://www.google.com/finance/quote/IREN:NASDAQ" target="_blank" rel="noopener nofollow">shows.</a>
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-07/6a918c7c-4c50-48c8-9187-4251bdea461a.png" alt="IREN tumbles after short seller calls miner ‘Prius at the Grand Prix’">
 <figcaption style="text-align: center;">
 IREN’s change in share price on July 11. Source: Google Finance
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The company’s market cap now sits at $2.09 billion.
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-net-zero-2050-climate-change/">Bitcoin is on a collision course with ‘Net Zero’ promises</a>

IREN tumbles after short seller calls miner ‘Prius at the Grand Prix’

Cointelegraph

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