This gargantuan piece of federal litigation has the potential to cost the '34 Act registered and NASDAQ-traded Bitcoin miner (I know!) Riot Platforms. . . boxcar numbers.
GMO's allegations include that Riot failed to perform its hosting duties under contract, and failed to share the appropriate portion of its Texas corporate welfare credits with GMO. Thus, the ~$540 million in claimed damages.
Here's the latest, filed in Manhattan this morning:
. . .The Case Management Conference scheduled for 1/29/2024 at 12:00 PM in Courtroom 17D, 500 Pearl Street, New York, NY 10007 is hereby rescheduled to Monday, February 5, 2024 at 2:15 p.m. Joint agenda letter due by February 1, 2024. . . .
With Riot off another seven per cent this morning -- post the SEC green lighting of spot Bitcoin ETFs -- which puts Riot at nearly 30 per cent down, in the last month. . . and puts Riot back where it last was in early November 2023. . . .
I think we will henceforth refer to this as "sector rotation". Investors used to buy Riot for exposure to Bitcoin, with the ease of NASDAQ exit-, and entry- points. But the expense load in the stock, for running vast facilities in dusty Texas. . . makes it a far riskier and more volatile bet, than just owning Bitcoin -- or now owning. . . an ETF holding spot Bitcoin.
So lots of formerly institutional holders, are likely selling -- and not coming back. They are exiting to the EFTs.
The traditional view of "sector rotation" is that once it happens, one must find a NEW set of investors, and convince them that THEY need to own the stock.
That's a tall order, having never once in seven long years made a penny from operations, on a GAAP basis -- all while burning about $600 million in cash cap. ex. every year. And in the last two years, the company has been paying between $60 and $75 million a year to executives, for losing a boatload. That's. . . frankly, indefensible.
Onward, grinning into a snowy King Day weekend here.
नमस्ते
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