Bitcoin miner Riot Platforms (RIOT) underperformed peers on Wednesday after prominent short-seller Kerrisdale Capital said it's short RIOT stock and long bitcoin (BTC).

Kerrisdale accused the miner of burning cash and gouging retail shareholders through its at-the-market (ATM) funding strategy.

"Like other US listed miners, $RIOT’s biz model is a dysfunctional hamster wheel of cash burn, which is why it loots retail shareholders with non-stop ATM issuance to fund operations. Even with $BTC near all-time highs, post-halving $RIOT’s mining ops aren’t profitable," the firm said in a social media post on X (formerly Twitter).

The short-seller also noted it's holding bitcoin (BTC) as a hedge against shorting the miner.

Riot's shares were among the worst-performing crypto-linked stocks on Wednesday, declining over 6%, while bitcoin (BTC) rose. A representative for Riot didn't immediately return a request for comments.

The move comes only a week after Riot started a hostile takeover of its peer Bitfarms (BITF) by buying 9.25% of the company to become its large shareholder.

This isn't the first time Kerrisdale has targeted crypto-related stocks. On March 28, the firm said it shorted Michael Saylor's MicroStrategy (MSTR), citing an unjustifiable premium. MSTR stock initially fell on the report but has recovered somewhat since then. However, the shares are still trading about 14% lower than before the short report became public.

RIOT Riot platforms short-selling Bitcoin Mining

Aoyon Ashraf

Aoyon Ashraf is CoinDesk's managing editor for Breaking News. He spent almost a decade at Bloomberg covering equities, commodities and tech. Prior to that, he spent several years on the sellside, financing small-cap companies. Aoyon graduated from University of Toronto with a degree in mining engineering. He holds ETH and BTC, as well as ALGO, ADA, SOL, OP and some other altcoins which are below CoinDesk's disclosure threshold of $1,000.