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Riot stock falls after short-seller Kerrisdale Capital’s report

By:
on Jun 5, 2024
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  • Shares of Bitcoin miner Riot Platforms fell sharply on June 5, shedding as much as 8%.
  • RIOT stock's price decline followed a short-seller report from Kerrisdale Capital.
  • Losses for other crypto mining firms came as Bitcoin rose above $70,000.

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Riot Platforms (RIOT) dropped more than 8% on Wednesday after Kerrisdale Capital revealed a short position in the US-based Bitcoin miner.

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RIOT stock’s price fell to $8.81 following the report, with this a 30-day low for the crypto stock.

“Today, we launch a war against bitcoin miners, an industry of snake oil salesmen that are incinerating both investor capital and the environment and should be banished from America much like the Chinese RTO frauds that we helped kick out a decade ago,” Kerrisdale Capital said in a report shared on X.

Kerrisdale, a short-seller that has previously targeted MicroStrategy (MSTR), faulted Riot Platform’s business model, saying the miner is a “wheel of cash burn.”

“Like other US listed miners, $RIOT’s biz model is a dysfunctional hamster wheel of cash burn, which is why it loots retail shareholders with non-stop ATM issuance to fund operations. Even with $BTC near all-time highs, post-halving $RIOT’s mining ops aren’t profitable,” the platform noted.

RIOT stock plummets

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While Kerrisdale outlined a short position in RIOT, it said it was long Bitcoin (BTC), the flagship cryptocurrency whose price is up 11% in the past 30 days and 60% up YTD.

Bitcoin price was up 2.1% in the past 24 hours on Wednesday morning ET hours, changing hands around $70,900 as bulls targeted a potential breakout to a new all-time high.

Meanwhile, Riot Platforms shares were down 7.24% in latest trading, changing hands at $8.97. Today’s losses finds the bitcoin miner’s stock facing a lower close that would extend the struggle seen since May 31. RIOT is down 17% this past month and 42% down year-to-date.

Other crypto stocks also struggled on Wednesday, with Cleanspark shares just in the green at the time of writing, while Marathon Digital Holdings was down 1.6%.

Bitfarms, which Riot Platforms sought to takeover last week, was also flat. Hut 8 Corp also traded just in the green on the day, with the shares up 5% in the past week.

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