To The Moon

IREN, Rigetti, D-Wave, SoFi, Bitmine, PayPal See Higher Short Volume

$IREN Ltd(IREN)$   saw heavier trading of borrowed shares that were sold short Tuesday after the operator of data centers that power artificial intelligence and Bitcoin announced an $875 million offering of convertible senior notes due 2031.

The daily short volume jumped to 7.53 million shares Tuesday, from 4.28 million a day earlier, before news of the convertible notes offering broke out. When trading resumed Wednesday morning, the stock headed lower, declining as much as 5.7% as concerns over potential dilution of the stake of existing shareholders outweighed the news on the company's new AI cloud deals. 

Short interest, or the tally of borrowed shares sold short that have not yet been closed has risen to almost 31 million shares as of mid-September, from 13.63 million shares at the end of last year. Speculators have been betting that the stock could turn lower after climbing about 500% this year. 

Iren signed a new multi-year AI cloud contracts, putting the company on course to achieve $500 million in annualized run-rate revenue from the 23,000 graphic processing units current operating and on order by the end of the first quarter of 2026, according to its press release Tuesday, before the convertible notes offering was announced. 

The company said it has 810 megawatts of operating data centers underpinning three verticals including Bitcoin mining, AI cloud services and AI data centers. 

JPMorgan analysts including Reginald Smith reiterated their underweight rating on the stock, noting that the recent stock rally that has added more than $10 billion in equity value since late August is already pricing in "some combination of as much as 1 gigawatt of cloud services capacity or more than 1 gigawatt colocation agreement." 

Attaining that capacity could cost as much as $25 billion in GPUs, while more than 1 gigawatt of colocation capacity could cost as much as $10 billion in infrastructure spending, the JPMorgan analysts wrote in a note to clients yesterday. 

While 75% of the analysts who cover the stock have a buy rating, their average price target is $50.40, implying expectations of a potential 15% decline from their current level.

$Rigetti Computing (RGTI.US)$ and its rivals $D-Wave Quantum (QBTS.US)$ and $IonQ Inc (IONQ.US)$, as well as $Bitmine Immersion Technologies (BMNR.US)$, $SoFi Technologies (SOFI.US)$ and $PayPal (PYPL.US)$ also had a higher short volume yesterday. 

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