Top Management Firms Suffer $220,000,000 in Losses from Bitcoin (BTC) Mining Investments: Report
A new report claims that Bitcoin (BTC) mining company Iris Energy’s investors are seeing a multi-million dollar wipe in the value of their holdings a year since its IPO.
According to an Australian Financial Review, shares of NASDAQ-listed Iris Energy have fallen 94.5% since its November 2021 IPO.
According to the Australian Financial Review, the top investors who have suffered big draws on their investments in Iris Energy include Regal Asset Management, Platinum Asset Management, Thorney Opportunities, Grok Ventures, Wilson Asset Management and OC Funds Management.
Iris Energy listed 8.3 million shares at a price of $28 per unit on November 17, 2021. Shares hit an all-time high of $28.25 on the same day before the descent began. Bitcoin had hit an all-time high of just over $69,000 seven days before Iris Energy went public.
The sharp drop in Iris Energy’s share price coincides with the Bitcoin mining company revealing that its US creditors are demanding repayment of $107.8 million on a loan taken out to buy crypto mining machines.
The Australian Financial Review further quotes Iris Energy co-CEO Daniel Roberts as saying that it is Iris Energy’s wholly-owned subsidiaries, which are structured as special purpose vehicles (SPVs), that owe New York Digital Investment Group (NYDIG) $107.8 million and will default on the loans.
“The companies [structured as SPVs] who owes them [NYDIG] the money, does not have the ability to pay it back.
The value of these machines is now substantially below the value of the outstanding debt and the cash flow generated by these machines is insufficient to service their debt financing obligations.
So, as a consequence, the group took the decision not to provide financial support and in effect the lender now has the right to come and collect these machines for themselves.”
The report further quotes Roberts as saying that Iris Energy’s subsidiaries taking out loans instead of the parent company is serving the business well for now.
“We’ve been dealt the cards we’ve got and all we can do is anticipate future problems, which we did around [SPV] debt facilities by capping them. We are still very excited about the business and the industry.”
Iris Energy also owes crypto mining equipment maker Bitmain $75 million in upfront payments. The report says that Iris Energy indicated earlier this month that it had not made any recent payments to Bitmain and did not expect to make any future payments under the same contract.
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Featured image: Shutterstock/Jorm S
