The company is facing backlash from the crypto ecosystem as it tries to garner support
Bitcoin miner Hut 8 shares fell over 23% on January 18, the same day an unverified report accused that insiders are readying to dump the firm’s stock.
Hut 8 stock tumbled from $9.30 to as low as $7.10 per share in late trading. The sell-off started after short-selling activist JCapital Research released a report named “The Coming HUT Pump and Dump,” claiming that the company’s merger with US Bitcoin (USBTC) on November 30, 2023, might be putting Hut 8 investors at risk.
We’re live at the @nasdaq headquarters in New York getting ready to ring the Opening Bell to celebrate the completion of our merger alongside the Hut 8 Corp. team and Board of Directors! 🎉Watch the livestream from 9:15am to 9:30am ET here https://t.co/DzzbDIjCb8. pic.twitter.com/RHaLJDer0o
— Hut 8 (@Hut8Corp) January 18, 2024
The JCapital report focused on the recent $725 million merger, contending that USBTC had a record of “legal trouble” and that an “undisclosed related party” holds most of Hut 8’s shares.
“We uncover that USBTC is backed by promoters with a history of legal trouble. In its short existence, USBTC appears to have defaulted on a loan and paid two government fines, one for committing securities violations,” says the report.
JCapital also claimed that USBTC’s CEO Michael Ho, now chief strategy officer at Hut 8, concealed his relationship with stock promoters from the Honig Group, which the US Securities and Exchange Commission accused of committing “classic pump and dump” and “fraudulent schemes” in 2019. Honig settled the case and consented to a ban from penny stocks trading.
The report was released on the same day that the opening bell at Nasdaq headquarters was rung by Hut CEO Jaime Leverton, which the company says was to “celebrate the completion of its all-stock merger” with USBTC.
Hut 8 has continued to increase its self-mined Bitcoin reserves, reporting on January 5 that it mined 453 Bitcoin in December 2023, increasing its reserves to 9,195 BTC, currently worth $377 million.
Emma Rodriguez is the Proofreader at the Big Blind, with seven years of experience and five years in online gambling. She plays a crucial role in maintaining content quality by ensuring error-free, reader-friendly information about the gambling industry.
