Iris Energy
Limited, the publicly-listed Wall Street Bitcoin (BTC) mining company (NASDAQ:
IREN) that recently pivoted to promoting itself as a high-performance computing
(HPC) data center operator, is facing a class action lawsuit alleging it
misrepresented its capabilities and prospects to investors.
The
lawsuit, filed
in the United States District Court for the Eastern District of New York,
claims that Iris Energy and its executives made false and misleading statements
about the company’s ability to transition its facilities from bitcoin mining to
HPC and artificial intelligence applications.
According
to the complaint, Iris Energy’s Childress, Texas facility, which the company
touted as a key asset for its HPC strategy, lacks critical features necessary
for such operations. The lawsuit alleges that the site has inadequate power
redundancy, cooling systems, and fiber connectivity.
The accusers suggest that Iren’s statements were allegedly untrue. Source: Courtlistener.com
The lawsuit
also cites statements made by Iris Energy’s co-CEO, Daniel Roberts, who claimed
the company had “built this base layer, this bedrock of high-performance
data centers that can do any high-performance compute.” The plaintiffs
argue that these statements were materially false and misleading, “because the
Company overstated the capabilities of its data center business, and its
overall prospects.”
Iris
Energy’s stock price fell approximately 15% following the publication of a
critical report by Culper Research, which raised concerns about the company’s
HPC claims and the suitability of its facilities for such applications.
“Culper
further stated that it was ‘short IREN because we believe the Company has
dramatically misrepresented the strength and potential of its assets for HPC/AI
Applications’,” the lawsuit commented.
IREN shares are falling more than 50% from the July 2024 highs. Source: Yahoo Finance
The class
action seeks to recover damages on behalf of investors who purchased Iris
Energy securities between June 20, 2023, and July 11, 2024, alleging violations
of federal securities laws.
Bitcoin Miners from Wall
Street Pivot to AI
IREN’s
shift towards AI is driven by increasingly challenging conditions in the
cryptocurrency mining market. The company’s latest fiscal year 2024 report
revealed that by adding AI industry support services to its offerings, IREN
managed to secure new revenue streams. Although the net loss still amounted to
$29 million, it was six times…
