A class action lawsuit was filed against Hut 8 Corp. (NASDAQ:HUT) on February 7, 2024. The plaintiffs (shareholders) alleged that they bought Hut 8 stock at artificially inflated prices between November 9, 2023 and January 18, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought HUT stock during that period can learn about joining the lawsuit here: https://zlk.com/pslra-1/hut-8-lawsuit-submission-form?wire=16.
Hut 8 is an energy infrastructure operator and Bitcoin (BTC-USD) mining company. Hut 8 was created in November 2023 through a merger between Hut 8 Mining Corp. and US Bitcoin Corp. (USBTC). USBTC has a 50% interest in a joint venture bitcoin mining facility in King Mountain, Texas.
The plaintiffs maintain that the company and two of its senior officers deceived investors by repeatedly lying and withholding vital information about the company’s business practices and prospects during the Class Period. Importantly, the lawsuit maintains that the defendants omitted truthful information about one of USBTC’s largest shareholders and the King Mountain asset.
The truth came out on January 18, 2024, when a J Capital Research report accused USBTC of having an undisclosed related party as one of its major shareholders. Plus, the report alleged that King Mountain JV “has historically failed to provide energy and high-speed internet” and that USBTC would have gone bankrupt without the merger.
Interestingly, during the Class Period, Hut 8 claimed in regulatory filings that the King Mountain JV has self-mining and hosting operations in Upton County, Texas with access to approximately 280 MW of electricity.
As per the class action lawsuit, Hut 8 caused HUT stock to trade at artificially inflated prices by knowingly and recklessly omitting truthful information about USBTC’s operations and assets.
Notably, on January 18, HUT stock fell 23.3%, causing massive damage to shareholders’ returns.
