Research and brokerage firm Bernstein has challenged short seller Culper Research's critical report on mining firm IREN, defending the company's AI potential and the value of its Bitcoin mining operations.
Bernstein Disputes Culper's Report on IREN
IREN's shares tumbled over 13% after Culper Research published a report claiming IREN's shares were overvalued, valuing it at $0 million to $100 million, citing its crypto mining operations as essentially worthless.
Culper expressed concerns about the company's suitability for the Childress site and AI operations, arguing that IREN's shares are worth 52% to 79% less than their current value.
In a note to clients, Bernstein analysts Gautam Chhugani and Mahika Sapra rebutted Culper's claims, noting that the Childress site is primarily focused on Bitcoin mining where existing infrastructure is effective.
They emphasized that IREN never indicated plans to retrofit the Childress site for AI operations similar to CoreWeave.
Analysts noted that 65% of the fair value they determined for IREN was based on Bitcoin mining, with the remaining 35% coming from artificial intelligence and high-performance computing (HPC).
“Therefore, we completely disagree that Bitcoin mining is worthless,” Chhugani and Sapra wrote.
They also emphasized that the AI advantage they envision for IREN comes from a larger 1.4 GW pipeline site in West Texas designed for future AI data center development.
Culper's report criticized IREN's GPU installation for Poolside.AI in British Columbia and claimed that IREN's air cooling design would fail in the warmer climate of Texas.
Bernstein disagreed, stating that any new field development would include all the features needed for AI data centers, such as power redundancy and liquid cooling.
*This is not investment advice.