Bitcoin
Bitcoin Miner Riot Platforms Shares Decline After Kerrisdale Short Position
Bitcoin Miner Riot Platforms Shares Decline After Kerrisdale Short Position
Riot Platforms (RIOT), a major Bitcoin mining company, saw its shares fall on Wednesday after well-known short seller Kerrisdale Capital announced its short position in RIOT and long position in Bitcoin (BTC).
In a post on X, Kerrisdale criticized Riot’s business model, describing it as a “dysfunctional, money-burning hamster wheel.” The company argued that Riot, like other US-listed miners, relies heavily on the continued issuance of ATMs to fund its operations, which they say is detrimental to retail shareholders. Kerrisdale further noted that even with Bitcoin near its all-time highs, Riot’s mining operations are not profitable, especially in the post-halving environment.
Kerrisdale’s strategy includes holding Bitcoin as a hedge against her short position in Riot. This dual approach underlines his belief in Bitcoin’s long-term potential, while also expressing skepticism about the Minas Gerais company’s financial health. On the day of the announcement, Riot shares fell more than 6%, marking one of the worst performances among cryptocurrency-related stocks, despite the rise in Bitcoin’s price.
This development comes just a week after Riot initiated a hostile takeover bid for Bitfarms (BITF), acquiring a 9.25% stake to become its largest shareholder. Riot’s aggressive move into the industry highlights its expansion ambitions while also facing scrutiny over its financial practices.