Riot Platforms (RIOT), a outstanding Bitcoin mining firm, noticed its inventory decline on Wednesday after well-known short-seller Kerrisdale Capital introduced its quick place on RIOT and lengthy place on Bitcoin (BTC).

In a publish on X, Kerrisdale criticized Riot’s enterprise mannequin, describing it as a “dysfunctional hamster wheel of cash burn.” The agency argued that Riot, like different U.S.-listed miners, depends closely on steady ATM issuance to fund its operations, which they declare is detrimental to retail shareholders. Kerrisdale additional famous that even with Bitcoin close to its all-time highs, Riot’s mining operations are unprofitable, particularly within the post-halving surroundings.

Kerrisdale’s technique consists of holding Bitcoin as a hedge in opposition to their quick place in Riot. This twin method underscores their perception in Bitcoin’s long-term potential whereas expressing skepticism in regards to the mining agency’s monetary well being. On the day of the announcement, Riot’s shares fell greater than 6%, marking one of many worst performances amongst crypto-related shares, regardless of Bitcoin’s price rising.

This growth comes only a week after Riot initiated a hostile takeover bid for Bitfarms (BITF), buying a 9.25% stake to change into its largest shareholder. Riot’s aggressive transfer within the business highlights its enlargement ambitions, even because it faces scrutiny over its monetary practices.