Iris Energy, an Aussie Bitcoin miner, now sits in the courtroom hot seat. Investors, led by one Paul Williams-Israel, slapped them with a class-action lawsuit. They claim the mining giant oversold its high-performance computing (HPC) potential. The lawsuit, filed on October 7 in New York, accuses Iris of falsely advertising their data centers as ready for HPC while pushing investors to scoop up IREN shares.
Texas Facility Fiasco: Data Centers Not HPC-Ready
It’s all boiling down to one key issue: the Texas Childress site. The lawsuit claims the data center was hyped as HPC-ready, but couldn’t handle the heat. No backup power, no advanced cooling—just a single power line running the whole show. For high-stakes HPC, that’s a massive no-go. Iris Energy kept saying the site was ready to roll for these intense computing needs, but the reality didn’t match up. Investors feel like they got the raw end of the stick.
Iris Energy apparently knew that the site’s design wasn’t up to snuff, but pressed forward with its claims. They should’ve known better, say the plaintiffs. Their spending? A huge red flag. The lawsuit says Iris Energy dropped less than $1 million per megawatt to build those centers. Industry estimates, meanwhile, say you need $10 to $20 million per megawatt to hit real HPC levels. So, there’s a gap, and it’s raising eyebrows.
Insiders’ Stock Sales Raise Eyebrows
Insider moves are also part of the drama. As 2024 kicked off, both co-founders—Daniel and William Roberts—began selling shares. That’s right before they made their public HPC pivot. So, investors are pointing at those trades as a sign that the Roberts brothers knew something was off. They sold shares while the public still thought Iris Energy was sitting on a gold mine of potential.
The lawsuit targets those sales as insider knowledge at play. And with shareholders buying in during the hype, it’s no wonder they’re not happy. Iris Energy has stayed mum so far, but the lawsuit’s getting traction. Investors want damages for what they see as a massive misrepresentation of the company’s real capabilities.
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