A new report claims that Bitcoin (BTC) Investors in mining firm Iris Energy are seeing a multi-billion dollar loss in the value of their holdings one year after going public.
According to the Australian Financial Review, shares of NASDAQ-listed Iris Energy have fallen by 94.5% since the initial public offering in November 2021.
According to the Australian Financial Review, the top investors who have suffered heavy losses 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 list 8.3 million shares at a price of $28 per unit on November 17, 2021. The shares reached an all-time high of $28.25 the same day before the decline began. Bitcoin had hit a record high of just over $69,000 seven days prior to Iris Energy’s listing.
The sharp drop in Iris Energy’s share price coincides with the fact that the Bitcoin mining company revealed that its American creditors are demanding that they be repaid $107.8 million of a loan obtained 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 that they will default on the loans
“The companies [structured as SPVs] What do they owe you? [NYDIG] the money, they do not have the ability to pay it back.
The value of those machines is now substantially below the value of the outstanding debt and the cash flow generated by those machines is insufficient to pay its debt financing obligations.
So, as a consequence, the group made the decision not to provide financial support and, in fact, the lender now has the right to come and pick up those machines themselves.”
The report further quotes Roberts as saying that Iris Energy subsidiaries taking loans instead of the parent company are serving the business well for now.
“We are dealt the cards we have and all we can do is anticipate future problems, which we did around the [SPV] debt facilities by enclosing them. We are still very excited about the business and the industry.”
Iris Energy also owes crypto mining equipment maker Bitmain $75 million in prepayments. The report says that Iris Energy indicated earlier this month that it had missed some recent payments to Bitmain and did not expect to make any future payments under the same contract.
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