Hut 8 Seeks Dismissal of Class-Action Lawsuit
Hut 8 Corp. has filed a motion in a New York federal court to dismiss a class-action lawsuit filed by its shareholders. The lawsuit stems from claims made in a report by short-seller J Capital Research, which accused Hut 8 of overpaying for US Bitcoin Corp. (USBTC), a company with operational flaws. Hut 8 argues that the report was part of an effort to manipulate the stock price for financial gain.
Class-Action Lawsuit and Short-Seller Strategies
In its December 2 filing, Hut 8 referred to the lawsuit as part of a “short-and-distort” strategy, where short-sellers attempt to profit by manipulating stock prices and using lawsuits to validate their claims. The company contends that these types of lawsuits are often dismissed and has urged the court to do the same in this case.
Allegations by J Capital Research and Stock Decline
The allegations in the lawsuit arise from a report by J Capital Research in January, claiming that Hut 8 misrepresented the financial health of its acquisition of USBTC and concealed operational challenges at a Texas facility. Following the report, Hut 8’s stock price dropped by 23%, leading to several shareholder lawsuits.
Hut 8’s Defense and Stock Recovery
Hut 8 has since recovered, with its stock increasing by 300% since the release of the report. The company argues that many of its statements were protected by “safe harbor provisions” and that the operational risks of USBTC were disclosed. Hut 8 denies that the stock price drop was caused by any misrepresentation.
Hut 8 Urges Dismissal of Lawsuit with Prejudice
Hut 8 concluded its motion by requesting the court to dismiss the case “with prejudice,” asserting that the plaintiffs have not proven any false statements or harm. The company urges the court to dismiss the lawsuit entirely, as no grounds for the claims exist.
