Bitcoin miner Riot Platforms (RIOT) underperformed its peers on Wednesday after prominent short seller Kerrisdale Capital said it was short RIOT stock and long bitcoin {{BTC}}.
Kerrisdale accused the miner of burning cash and gouging retail shareholders through its market-rate (ATM) funding strategy.
“Like other US-listed miners, $RIOT’s biz model is a dysfunctional cash burner, so it plunders retail shareholders with non-stop ATM issuances to fund operations. Even if $BTC is near all-time highs, post-halving $ RIOT’s mining operations are not profitable,” the firm said in a social media post on X (formerly Twitter).
The short seller also stated that he was holding Bitcoin (BTC) to hedge against a miner opening a short position.
Shares of Riot were among the worst-performing crypto-related stocks, falling over 6% on Wednesday, while Bitcoin (BTC) rose. A representative for Riot did not immediately return a request for comment.
The move comes just a week after Riot launched a hostile takeover of peer Bitfarms ( BITF ) by acquiring 9.25% of the company, becoming its major shareholder.
This isn’t the first time Kerrisdale has targeted crypto-related stocks. On March 28, the firm announced it had shorted Michael Saylor’s MicroStrategy (MSTR), citing an unfair premium. MSTR shares initially fell on the report but have since rebounded somewhat. But shares are still trading about 14% lower than before the brief was made public.