Renowned short-seller Jim Chanos has publicly attacked the growth narrative for bitcoin miner and AI cloud provider IREN Ltd. (NASDAQ:IREN), alleging that a recent bullish analyst report is built on “ridiculous assumptions” and unrealistic financial projections.
Check out IREN’s stock price here.
Chanos Calls IREN’s AI Profit Projections Unrealistic
In a series of posts on the social media platform X, Chanos dismantled the Cantor Fitzgerald report that has been used to justify optimistic price targets for the company.
At the heart of Chanos’s critique are the report’s financial models, which he argues defy industry norms and basic accounting principles. He specifically targeted the projection that IREN's AI data center business could achieve 80% marginal EBITDA margins.
“Yet no one is doing much over 50% EBITDA margins…right now,” Chanos stated. “Lots of Hopium at work in this space right now.”
See Also: OPEN, IREN And Now HUT: Eric Jackson Takes Long Position In Hut 8, Citing Pivot To AI Infrastructure
Questions On IREN’s Accounting, And 9-Year GPU Life
Furthermore, Chanos highlighted what he described as a “ridiculous” depreciation schedule for the company’s planned $2.9 billion in new equipment.
He calculated that the report assumes an “almost 9-yr life” for the assets, which he notes are likely GPUs that become obsolete far more quickly.
A more realistic depreciation timeline, he argued, would significantly slash the company’s future earnings estimates.
Jim Chanos Spars With IREN Director Mike Alfred
The public critique escalated when Chanos engaged in a pointed exchange with IREN board member Mike Alfred. After Alfred popped into Chanos’ comment section, calling the Cantor price targets “bearish,” Chanos publicly questioned his fiduciary duties.
“So as a director of $IREN, does this mean we shouldn’t expect any more insider sales of stock below $200, Mike?” Chanos asked, adding scrutiny over Alfred's earlier promotion of a competitor.
Price Action
Shares of IREN closed 8.45% higher at $69.56 per share on Tuesday and rose 1.78% in after-hours. It has a 52-week range of $5.12 to $72.30 per share. Higher by 565.01% year-to-date, the stock has gained 715.47% over the year.
IREN maintained a stronger price trend over the short, medium, and long terms, with a poor value ranking, as per Benzinga’s Edge Stock Rankings. Additional performance details are available here.
The S&P 500 index ended 0.16% lower at 6,644.31 on Tuesday, whereas the Nasdaq 100 index declined 0.69% to 24,579.32. On the other hand, Dow Jones gained 0.44% to 46,270.46.
On Wednesday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading higher.
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