Australian bitcoin miner Iris Energy sinks on market debut, shares tumble 22 per cent

Australian bitcoin miner Iris Energy tanked on its Nasdaq debut overnight, with its shares spending the day in the red.

Daniel Roberts (R) exec chair and co-founder Iris energy with his brother Will Roberts co-founder Iris energy, photographed outside Chifley Square in Sydney. Britta Campion / The Australian

Australian bitcoin miner Iris Energy tanked on its Nasdaq debut overnight, with its shares spending the day in the red after opening at the $US28 IPO price.

The Sydney-based green miner, which accesses abundant or under-utilised renewable energy to power its operations, dropped as much as 22 per cent in its first session and closed down 12.7 per cent, at $US24.45.

The cool reception from the market came after Iris on Wednesday said its IPO priced at $US28 a share, above the expected range of between $25 and $27.

The company raised $US231.5m in the IPO on the sale of 8.27 million shares. The float proceeds will be used to buy bitcoin mining hardware equipment and buy and build data centres, among other growth initiatives, as well as for working capital and general corporate purposes, the company said in an SEC filing earlier this month.

Founded by two ex-Macquarie bankers, brothers Will and Daniel Roberts, both in their 30s, have a 10 per cent shareholding in the company, which they set up in 2018.

Iris owns and operates bitcoin mining data centre infrastructure powered by renewable energy in British Columbia, Canada. The site has been operating since 2019 and has about 30 megawatts of capacity.

As of September 30 this year, the company also has conditional and unconditional rights to a number of sites across British Columbia, Texas and the Asia-Pacific, over which it is currently pursuing development activities.

It sells all the bitcoin that it mines.

Bitcoin is currently trading at around $US60,000 and is down 5 per cent this week after taking a tumble on Tuesday following new tax rules announced by the Biden administration in the US that will hit crypto brokers.

“The group‘s miners are designed specifically to mine bitcoin and its future success will depend in a large part upon the value of bitcoin, and any sustained decline in its value could adversely affect the business and results of operations,” Iris said in its SEC filing.

“Specifically, the revenues from Bitcoin mining operations are predominantly based upon two factors: (i) the number of Bitcoin rewards that are successfully mined and (ii) the value of Bitcoin.

“A significant decline in the market price of Bitcoin, an increase in the difficulty of Bitcoin mining, changes in the regulatory environment and/or adverse changes in other inherent risks would significantly negatively impact the group’s operations. “

According to its prospectus, Iris posted an after-tax loss of $678.7m for the September quarter compared with an after-tax loss of $500,000 for the same period last year.