Bitcoin mining firm Hut 8 Corp. filed a motion to dismiss a class-action lawsuit from its shareholders it alleges was spurred on by a short-seller report claiming the firm overpaid for a company with severe operational issues.
In its Dec. 2 filing to a New York federal court, Hut 8 claimed short-seller J Capital Research engaged in “a campaign to sink Hut 8’s stock for its own gain.”
“This case arises from a short seller’s attempt to obtain a monetary gain on its short position in Hut 8 at the expense of ordinary shareholders,” the crypto miner said.
“These ‘short and distort’ schemes are all too frequently followed by shareholder class actions that parrot the short seller’s negative views and label the report a ‘corrective’ disclosure.”
“These short-and-distort cases are regularly dismissed,” the miner said. “This case should be dismissed too.”
J Capital Research published a report in January claiming that Hut 8 overstated the profitability of its acquisition of US Bitcoin Corp. (USBTC), concealed operational issues at a Texas facility and potentially hid ownership shares.
Hut 8 stock dropped 23% after the report’s publication, sparking multiple shareholder lawsuits in March from individuals who suffered losses and others claiming that all shareholders who purchased Hut 8 shares during the timeframe are entitled to compensation.
Excerpt from the opening of Hut8’s dismissal motion. Source: PACER
Hut 8 argued that its stock price has fully recovered, increasing by about 300% since J Capital’s report. It added that many of its forward-looking public statements were protected by “safe harbor provisions,” while warnings about USBTC’s limited operating history were already disclosed.
USBTC held a 50% interest in a joint venture Bitcoin mining facility in Texas, which was acquired by Hut 8 in a merger in November 2023.
Hut 8 said the lawsuit failed to prove the misrepresentations were false when made or that investors were actually harmed. It also said there was a direct link between the allegations and stock price decline.
The firm concluded that the shareholder complaint “should be dismissed in its entirety, with prejudice, together with such other, further, and different relief as the Court deems just and proper.”
Related: Hut 8 tips 66% hashrate boost after deal to buy 31K Bitcoin miners
Shares in Hut 8 (HUT) closed 3.6% down on Dec. 3 at $25.06, seeing a slight 0.5% rise in after-hours trading, according to Google Finance.
The Bitcoin miner’s stock is up nearly 99% so far this year and has gained 296% since a January low of $6.33.
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