Stronghold Digital Mining, Inc. Filed a False and Misleading Prospectus in Support of its IPO
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Class A common stock in connection with Stronghold Digital Mining, Inc.’s (NASDAQ: SDIG) October 2021 initial public offering (“IPO”). Stronghold is a crypto asset mining company focused on mining Bitcoin. It owns and operates two low-cost, environmentally beneficial coal refuse power generation facilities in Pennsylvania.
According to the complaint, the Registration Statement filed in support of Stronghold’s IPO was misleading. Specifically, it failed to state that contracted suppliers were reasonably likely to miss anticipated delivery quantities and deadlines, and that, due to strong demand and pre-sold supply of mining equipment in the industry, Stronghold would experience difficulties obtaining miners outside of confirmed purchase orders. Consequently, there would be a significant risk that Stronghold could not expand its mining capacity as expected and would experience significant losses.
On March 29, 2022, Stronghold announced its fourth quarter and full year 2021 financial results. The Company reported a net loss of $0.52 for the quarter, below analyst estimates of $0.04 earnings per share, and Stronghold’s Chief Executive Officer cited “significant headwinds in our operations which have materially impacted recent financial performance.” On this news, the Company’s stock price fell as much as $3.28, or 32%, to close at $6.97 per share on March 30, 2022. By the commencement of the class action, Stronghold stock has traded as low as $4.78 per share, a more than 75% decline from the $19 per share IPO price.
Next Steps: If you acquired shares of Stronghold Digital Mining, Inc. (SDIG) pursuant to the Company’s October 2021 IPO, you have until June 13, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.