Bitcoin mining sector is ‘sort of a scam’: Kerrisdale Capital
Shares
of
Riot
Platforms
(RIOT)
are
moving
lower
after
Kerrisdale
Capital
came
out
with
a
call
to
short
the
company’s
stock.
Kerrisdale
Capital
CIO
Sahm
Adrangi
joins
Market
Domination
to
explain
the
call.
“I
think
our
investment
thesis
is
that
this
sector
is
just
not
going
to
be
around
in
five
years.
Bitcoin
mining
is
one
of
the
stupidest
business
models
we’ve
come
across
in
our
time
short-selling,”
Adrangi
tells
Yahoo
Finance.
He
adds
that
looking
behind
the
economics
of
all
US
bitcoin
miners
reveals
they
‘don’t
make
money,”
but
instead
issue
shares
to
pay
themselves
healthy
stock
compensation
and
buy
more
mining
hardware.
“We
disagree
with
the
characterization
of
the
Bitcoin
mining
industry
and
of
Riot,
and
the
equally
unsound
conclusions
reached
in
the
Kerrisdale
Capital
report.
We
believe
these
errors
will
be
demonstrated
through
the
execution
of
our
ambitious
2024
growth
plans
and
resulting
financial
performance,”
a
Riot
spokesperson
said
in
response
to
Kerrisdale’s
call.
For
more
expert
insight
and
the
latest
market
action,
click
here
to
watch
this
full
episode
of
Market
Domination.
This
article
was
written
by
Gabriel
Roy
Video
Transcript
And
moving
on,
we
are
watching
shares
of
Riot
platforms.
Shares
are
down
about
2%
well
off
the
lows
of
the
session.
The
move
coming
after
short
seller,
Kerrisdale
Capital
is
out
with
a
call
to
guess
what,
short
the
stock
and
also
while
being
Long
Bitcoin.
So
a
Paris
trade
joining
us
now
is
Kerrisdale
Capital
founder
and
Cio
S
Andr.
And
thank
you
for
joining
us
here
today.
Um
Just
tell
us
uh
what’s
your
thesis
here,
your
investment
thesis
Long
Riot
and
then
maybe
pairing
that
with
a
Bitcoin
position
as
well
or
excuse
me,
Short
Riot
and
then
the
Long
Bitcoin.
Yeah,
I
mean,
I
think
our
investment
thesis
is
that
this
sector
is
just
not
going
to
be
around
in
five
years.
Um
Bitcoin
mining
is
one
of
the
stupidest
business
models
we’ve
come
across
in
our
time
short
selling
over
the
past
15
years
or
running
Kalle
um
basically
barriers
to
entry
are
zero.
companies
from
all
over
the
world
can
buy
these
A
six
from
China.
Um
Take
them
next
to
a
a
waterfall
in
South
America
and
get
much
cheaper
access
to
electricity
um
and
be
a
lower
cost
producer
And
basically,
if
you
look
at
the
economics
behind
all
the
Bitcoin
miners
in
the
United
States,
they
don’t
make
money,
they
just
issue
shares
to
pay
themselves,
you
know,
healthy
stock
comp
and
buy
more
Asic
and,
you
know,
never
really
generate
a
return.
And
the
whole
thing
is
sort
of
a
scam
and
we
sort
of
published
on
Riot
Today
plan
to
publish
on
more.
Um
you
know,
as
this
whole
sector
ultimately
goes
to
zero,
some,
I
have
many
questions.
First
of
all,
if
it’s
just
a
com
if
it’s
just
a
commodity
and
there’s
nothing
differentiating
what
makes
that
a
scam.
I
mean,
some,
something
could
be
a
bad,
bad
business
model
without
being
a
scam
that
has,
that
has
some
connotations
here
that
there
is
something
illicit
or
illegal
going
on.
Sure.
It’s
a
horrible
business
model.
It’s
not
necessarily
um
technical,
technically,
um
you
know,
a
complete
uh
fraudulent
illicit
actions.
But,
you
know,
I
mean,
this
is
just
as
bad
of
a
business
model
as
you
can
get
and
what
you
see
with
terrible
business
models.
I
mean,
I
think
back
to
cannabis
companies
in
2017,
2018,
uh
when
you’re
the
ceo
of,
of
such
a
terrible
business,
um
there’s
a
lot
of
shady
things
that
you
do
and
uh
essentially
you’re
just
sort
of
enrich
yourself
at
the
expense
of
shareholders
and
that’s
what’s
happening
here.
I
want
to
read
a
statement
that
came
to
us
via
riot
and
this
is.
Uh
here
we
go.
We
disagree
with
the
characterization
of
the
Bitcoin
mining
industry
and
a
riot
and
the
equally
unsound
conclusions
reached
in
the
Kerrisdale
Capital
report,
we
believe
these
areas
will
be
demonstrated
through
the
execution
of
our
ambitious
2024
growth
plans
and
resulting
financial
performance.
Uh
What
do
we
know
about
these
growth
plans?
And
then
I
guess,
how
do
you
balance
that
against
the
incredible
shares
that
have
been
minted,
diluting
the
shareholders
to
pursue
its
growth?
Yeah.
Isn’t
that
absurd?
This
company
has
diluted
shareholders
by
18%
already
year
to
date
this
year.
I
mean,
I’m
looking
forward
to
that
growth
and
delusion
over
the
course
of
the
year.
Maybe
they
might
be
able
to
even
get
up
to
diluting
shareholders
by
50%
just
this
year,
maybe
another
50%
next
year.
Um
Since
2020
the
company
has,
is
increased
its
share
uh
share
by
multiples.
Um
And
this
is
just
a
part
of
the
chorus
across
the
entire
industry.
I
mean,
when
they
talk
about
growth,
they
just
mean
spending
more
on
Capex
and
buying
more
computers.
But
you
know
what?
So
is
everyone
else
in
the
US
and
so
is
everyone
across
the
world.
Um
And
so
what
you
sort
of
see
is
that
um
the
network
cash
rate
just
increases
over
time.
They
each
month,
uh
Each
of
these
miners,
including
it,
get
less
and
less
Bitcoins
even
as
they’re
plowing
all
of
the
cash
that
they’re
raising
from
shareholders
back
into
buying
more
computers.
It’s
just
basically
one
big
hamster
wheel
uh
where
they
take
money
from
investors,
buy
more
computers
and
then
produce
less
Bitcoin
per
share
each,
each
uh
subsequent
year.
Some
why
if
the,
if
the
whole
industry
is
so
terrible,
why?
Single
out
riot
we
got
to
start
somewhere.
And
so
we
started
with
riot.
And
uh
the
other
thing
that
we
haven’t
talked
about
here
is
Bitcoin.
Mining
is
horrible
for
the
environment.
I
mean,
China
has
kicked
Bitcoin
miners
out
of
their
country
because
it’s
such
an
absurd
concept.
Uh
You
burn
all
of
this
fossil
fuel
to
f
uh
to
fuel
speculation
uh
around
an
imaginary
asset.
Uh
This
doesn’t
belong
in,
within
us
borders.
The
whole
industry
should
just
get
kicked
out
and
be
banished
to,
you
know,
other
countries
that
want
to
deal
with
it.
Well,
I
mean,
it’s
bad
for
the
environment.
We
all
share
an
environment.
So,
so
if
it’s
bad
for
the
environment
here,
it’s
bad
for
the
environment
anyway,
before
we
look
out
though,
I
do
want
to
ask
you
about
another
short
call
that
you
had
on
micro
strategy.
This
similarly
were
short
micro
strategy.
Long
Bitcoin.
Um
You
made
that
call,
I
believe
on
March
28th
since
then
kind
of
flattish
for
both,
right?
So
how
long
do
you
think
it’s
gonna
take
for
that
to
play
out?
And
you
know,
if
you’re
talking
about
that
sort
of
the
stuff
that
it’s
necessary
to
fuel
Bitcoin.
Mining
is
such
a
dirty
business.
Why
long
Bitcoin
at
all?
Well,
I
mean,
I
think
as
a
trade,
um,
uh
we
want
to
be
hedged,
you
know,
so
we’re
short
the
miners,
we
think
they’re
going
to
zero.
Who
knows
what’s
gonna
happen
to
Bitcoin.
Your
guess
is
as,
is
as
good
as
mine
in
the
case
of
micro
strategy.
Uh
I
think
if
it
owns
$14
billion
of
Bitcoin,
the
company
should
be
valued
at
$14
billion
by
the
market.
Um
What
you
see
is
a
premium
that
makes
no
sense,
you
know,
situations
where
they
own
$15
billion
of
Bitcoin,
but
the
market
is
valuing
them
at
35
billion.
I
mean,
uh
you
know,
uh
a
bank
holding
$100
is
valued
at
$100.
It
shouldn’t
be
valued
at
$500.
Um
So
that’s
micro
strategy,
in
the
case
of
the
Bitcoin
miners
is
just
a
terrible
business.
Um
And
in
both
those
cases,
we
own
Bitcoin.
Uh
just
because
we
think
that
the
those
stocks
are
going
to
go
down
relative
to
Bitcoin.
So
if,
well,
you
know
that
way,
we
don’t
have
a
view
on
whether
Bitcoin
goes
up
100%
or
goes
down
50%.
We’re
hedged.
Sam.
Thanks
so
much.
Um
Good
to
get
your
perspective
on
all
of
these
different
ideas.
Appreciate
it.
Absolutely.
Thank
you.
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