Class-Action Lawsuit Targets Hut 8’s USBTC Acquisition
Hut 8 Corp. is pushing for the dismissal of a class-action lawsuit filed by its shareholders, which stems from a report by short-seller J Capital Research. The report accused Hut 8 of misrepresenting the profitability of its acquisition of US Bitcoin Corp. (USBTC) and of concealing operational problems at a Texas mining facility. The lawsuit alleges that these misstatements led to significant losses for shareholders after Hut 8’s stock price dropped by 23%.
Hut 8 Denies Allegations, Cites Short-Seller Strategies
In its December 2 filing, Hut 8 described the lawsuit as part of a “short-and-distort” strategy, in which short-sellers attempt to manipulate the market by spreading false information and triggering shareholder lawsuits. The company argues that such claims are common in the finance industry and are often dismissed by courts. Hut 8 has requested the court to dismiss the lawsuit, asserting that it lacks merit and is part of an effort to manipulate the company’s stock.
Stock Price Rebound Despite Allegations
Following the release of J Capital Research’s report, Hut 8’s stock price fell by 23%. However, the company’s shares have since rebounded, rising 300% from their low point. Hut 8 argues that its public statements about USBTC were accurate and protected by safe harbor provisions under securities law. The company also maintains that the operational risks at USBTC were disclosed in its filings, and that shareholders have failed to show any link between the alleged misstatements and the stock price decline.
Hut 8 Pushes for Dismissal of Case
Hut 8 is requesting that the court dismiss the case with prejudice, arguing that the plaintiffs have failed to demonstrate any actual harm or evidence of false statements. The company believes that the claims lack legal merit and that the case should be dismissed in its entirety.
