Bitcoin (BTC) miner Hut 8 has seen its share value tumble greater than 23% on Jan. 18, the identical day the agency rang the Nasdaq’s opening bell and one other unfold an unverified report alleging insiders are making ready to dump its inventory.
Hut’s share value fell from $9.30 to as little as $7.10 in after-hours buying and selling. The sell-off started across the identical time as activist short-selling agency JCapital Analysis launched a report titled “The Coming HUT Pump and Dump,” which claimed that the agency’s Nov. 30, 2023 merger with fellow Bitcoin miner US Bitcoin (USBTC) may very well be putting Hut 8 buyers in hurt’s method.
JCapital Analysis — which admits to being short-side biased on its web site — took purpose on the latest $725 million merger deal, claiming that USBTC had a historical past of “authorized hassle” and that almost all of the lately merged Bitcoin miner’s shares are held by an “undisclosed associated occasion.”
“We uncover that USBTC is backed by promoters with a historical past of authorized hassle. In its quick existence, USBTC seems to have defaulted on a mortgage and paid two authorities fines, one for committing securities violations,” JCapital wrote.
Moreover, JCapital claimed that USBTC’s CEO Michael Ho — now Hut’s chief technique officer — hid his relationship with inventory promoters referred to as the Honig Group, which was accused by the U.S. Securities and Alternate Fee in 2019 of partaking in “traditional pump and dump” and “fraudulent schemes.” Honig settled the fees and agreed to be banned from buying and selling penny shares.
“In the end, we strongly imagine that [HUT} shareholders are prone to really feel the ache of being on the improper aspect of an over-levered pump-and-dump, solely to be left holding essentially the most inefficient Bitcoin miner, which is unprofitable even at a Bitcoin value of over $60,000,” the report concluded.
“There’s no method to confirm the quick report,” one crypto neighborhood member on X (previously Twitter), Cantonese Cat, remarked in a Jan. 18 publish. “Many are promoting out of panic. It may very well be actual, it may very well be panic.”
Cointelegraph reached out to JCapital to confirm the claims made and likewise contacted Hut 8 for touch upon the accusations.
Associated: Bitcoin miners in ‘promoting mode,’ dumping $450M BTC in a day
The report arrived on the identical day that Hut CEO Jaime Leverton rang the opening bell on the Nasdaq headquarters in New York, one thing the agency mentioned was performed to “have fun the completion of its all-stock merger” between Hut 8 and USBTC.
We’re reside on the @nasdaq headquarters in New York on the brink of ring the Opening Bell to have fun the completion of our merger alongside the Hut 8 Corp. group and Board of Administrators! Watch the livestream from 9:15am to 9:30am ET right here pic.twitter.com/RHaLJDer0o
— Hut 8 (@Hut8Corp) January 18, 2024
In contrast to many crypto miners pressured to promote at the very least a part of their mined Bitcoin holdings resulting from market headwinds, together with companies corresponding to Core Scientific and Riot Blockchain, Hut 8 has continued to extend its self-mined Bitcoin stash.
In a Jan. 5 assertion, Hut reported that it had mined 453 Bitcoin in December 2023, bringing its reserves to a complete of 9,195 BTC, value $377 million at present costs.
