Class-Action Lawsuit Filed by Shareholders Against Hut 8
Hut 8 Corp. has filed a motion to dismiss a class-action lawsuit filed by its shareholders. The lawsuit follows allegations from short-seller J Capital Research, which claimed that Hut 8 overpaid for US Bitcoin Corp. (USBTC), a company facing operational difficulties. Hut 8 argues that the report was part of a strategy to devalue the company’s stock for financial gain.
Dismissal Requested for “Short-and-Distort” Strategy
In its submission, Hut 8 referred to the lawsuit as an example of a “short-and-distort” strategy, where short-sellers manipulate stock prices to profit. The company contends that these types of cases typically result in the amplification of short-sellers’ claims and are often dismissed. Hut 8 urged the court to do the same.
J Capital Research’s Allegations and Stock Price Drop
The lawsuit stems from J Capital Research’s January report, which accused Hut 8 of misrepresenting the profitability of its acquisition of USBTC, hiding operational issues at a Texas facility, and potentially concealing ownership details. After the report’s release, Hut 8’s stock price dropped 23%, prompting shareholder lawsuits.
Stock Price Recovery and Legal Arguments
Since the report’s release, Hut 8’s stock price has rebounded, increasing by 300%. The company claims that many of its public statements were protected by “safe harbor provisions” and that the operational risks of USBTC were disclosed. Hut 8 also denied that the stock price drop was linked to any misrepresentations.
Hut 8 Seeks Dismissal of Lawsuit with Prejudice
Hut 8’s motion concludes with a request for the case to be dismissed “with prejudice,” arguing that the plaintiffs have not demonstrated that the company’s statements were false or that shareholders suffered actual harm. The company urges the court to dismiss the lawsuit entirely.
