The market capitalisation of the German mining company Northern Data fell by almost $300m following reports that the BaFin was conducting an investigation into its top executives for alleged market manipulation.
Shares in Northern Data are listed on Deutsche Börse. On Friday, 1 October, the stock fell by more than 30%. At the time of writing, they traded near €56, having traded above €74 a week earlier.
The company’s market capitalisation fell below €900m. It was valued at €1.21bn at the close of 30 September.
In an interview with the Financial Times, a BaFin spokesman confirmed that the regulator is conducting an investigation related to “potential market manipulation in the context of Northern Data,” but declined to comment further.
According to the publication, executives were charged after Northern Data published preliminary figures for the 2020 financial year. The firm reported a loss of €12.3m, while an operating profit of between €45-60m had been expected. Revenue amounted to €16.4m, versus forecasts of €120-140m.
The company attributed the gap between forecast and outcome to its inability to realise revenue from two major customers.
A spokesman for the Frankfurt prosecutors’ office told the FT that a complaint has been filed against Northern Data — the charges relate to a potentially misleading press release published by the company in November 2019.
Northern Data rejected the allegations of market manipulation. The company said the complaint relates to the announcement of the acquisition of the power-provision provider for Bitcoin mining Whinstone US. The latter was bought by the mining company Riot Blockchain.
Earlier in September 2021, Northern Data entered into a deal with the mining firm Bitfield, envisaging the purchase of at least 86% of the stake and the indirect acquisition of around 33,000 ASIC miners.
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