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Bitcoin Miner Riot Platforms (RIOT) falls after being targeted by short seller Kerrisdale
Bitcoin miner Riot Platforms (RIOT) underperformed its peers on Wednesday after prominent short seller Kerrisdale Capital said it was RIOT stock short and bitcoin long (BTC).
Kerrisdale accused the miner of burning cash and defrauding retail shareholders through its market-based financing (ATM) strategy.
“Like other US-listed miners, $RIOT’s business model is a dysfunctional, cash-burning hamster wheel, which is why it loots retail shareholders by continuously issuing ATMs to fund operations. $BTC near all-time highs, $RIOT mining operations post-halving are unprofitable,” the firm said in a posts on social media on X (formerly Twitter).
The short seller also noted that he is holding bitcoin (BTC) as a hedge against shorting the miner.
Riot shares were among the worst-performing crypto-linked stocks on Wednesday, losing more than 6%, while bitcoin (BTC) rose. A representative for Riot did not immediately respond to a request for comment.
The move comes just a week after Riot initiated a hostile takeover of its peer Bitfarms (BITF) by purchasing 9.25% of the company to become its largest shareholder.
This isn’t the first time Kerrisdale has targeted cryptocurrency-related stocks. On March 28, the firm said it shorted Michael Saylor’s MicroStrategy (MSTR), citing an unjustifiable premium. MSTR shares initially fell on the report, but have since recovered slightly. however, the the shares are still traded about 14% less than before the brief report became public.