Bitcoin Miner Riot Platforms Stock Decline Following Kerrisdale Short Position

Bitcoin Miner Riot Platforms Stock Drops After Kerrisdale Short Position

Riot Platforms (RIOT), a well-known Bitcoin mining company, saw its shares decline on Wednesday after well-known short seller Kerrisdale Capital announced a short position in RIOT and a long position in Bitcoin (BTC).

In a post on X, Kerrisdale criticized Riot’s business model, describing it as a “dysfunctional hamster wheel of cash burn.” The firm alleged that Riot, like other US-listed miners, relied heavily on continued ATM issuances to fund its operations, harming its retail shareholders. Kerrisdale also noted that even though Bitcoin is near all-time highs, Riot’s mining operations are unprofitable, especially in the post-halving environment.

Kerrisdale’s strategy involves holding Bitcoin as a hedge against her short positions in Riot. This dual approach highlights their belief in Bitcoin’s long-term potential, while also expressing doubts about the mining firm’s financial health. On the day of the announcement, Riot’s shares fell more than 6%, marking one of the worst performances among crypto-related stocks even as the price of Bitcoin rose.

This development comes just a week after Riot launched a hostile takeover bid for Bitfarms (BITF), acquiring a 9.25% stake to become its largest shareholder. Riot’s aggressive push into the industry highlights its expansion ambitions, even as it faces scrutiny over its financial practices.