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Northern Data: Share collapses after critical comment – shortseller attack?

Northern Data’s share price plunges sharply today. In recent months, the title has been one of the high flyers on the Frankfurt Stock Exchange and climbed from 11 euros in November 2019 to 82.40 euros at the beginning of July this year. Today the Northern Data share rushes down to EUR 47.80 and is currently trading at EUR 50 after yesterday’s XETRA closing price at EUR 79.00.

The crash is accompanied by high sales and a critical report on Northern Data. A pattern that is well known from previous short attacks against other companies. Some of the allegations made in these attacks have proven to be true, as the Wirecard scandal is currently illustrating very well, other allegations – for example against Ströer – were in the sand and the share prices of the attacked companies recovered.

The cause of the fall in the course of Northern Data is today a contribution on the website mediumwho is critical of the company. The author remains “semi-anonymous” and only appears under the abbreviation “Ken L.” on. The report takes up a large part of allegations against Northern Bitcoin, which were previously in the Short message service Twitter circulated.

The company is accused of, among other things, a distortion of the actual operational activities. The company sees itself as a provider of high-performance computing (HPC), but primarily offers Bitcoin mining hosting on unfavorable terms – according to the anonymous author. One of the reasons for this is that energy prices are too high and not competitive in the long term, which Northern Data charges its own customers. Among other things, a high level of dependence on the price of the bitcoin, a concentration of transactions with related parties – in particular its own major shareholders – and a business model that is not sustainable are criticized.

Northern Bitcoin had already responded to parts of the allegations that had been circulating for some time in the run-up to the Medium report. “Our services to our customers not only include secure power supply at very favorable conditions, but a whole bundle of other services,” said CEO Aroosh Thillainathan when asked by the 4investors editorial team about the information circulating on Twitter, but not specifically about the “add on -Performances. “One of the first fields of application was and is Bitcoin mining, and as of today our customers use our HPC capacities mainly for this task. Over the next few years, more and more fields of application will emerge that will inevitably turn HPC into a massive growth market, ”the manager continued. According to Thillainathan, the fields of application include video rendering and the biotech or life science sector. Northern Data has not yet commented on the Medium report.

At a glance – chart and news: Northern Data

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