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Published November 15, 2024
Investors have chilly feelings about Iris Energy Limited after the bitcoin mining operation recently lost big. While Iris sold investors on hopes of a high-power computing facility, in reality, investors got left in the dark when that computing facility had inadequate facilities to get the job done. Aggrieved investors pulled the plug on Iris stock, which dropped 15% in one day. Some of those investors recently filed a class action lawsuit in hopes of recovering their losses.
According to the lawsuit, in 2023 Iris issued a press release announcing it was opening new, high-powered data processing centers, shifting its focus from cryptocurrency mining. Public statements also emphasized these centers’ cooling efficiency, which is important because high-powered computing uses a great deal of energy. In reality, Iris’ executives knew this new site was ill-equipped for use as a data center and that the cooling systems were sub-par. Despite that knowledge, Iris’ executives fraudulently allowed these over-the-top promises to be published anyhow.
The truth came to light when Culper Research published a disturbing report revealing that Iris had severely oversold its abilities, particularly at its Texas site in Childress County. After this report came out, shocked investors dumped their shares, causing Iris’ price to plummet.
Some of those angry shareholders are now joining the class-action lawsuit.