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Stronghold Digital Mining, Inc.


The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired Stronghold Digital Mining, Inc. (“Stronghold” or the “Company”) (NASDAQ: SDIG) Class A common stock pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s October 2021 initial public offering (“IPO” or the “Offering”). Investors have until June 13, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
 
Stronghold is a crypto asset mining company focused on mining Bitcoin. It wholly-owns and operates two low-cost, environmentally beneficial coal refuse power generation facilities in Pennsylvania.
 
On October 21, 2021, the Company filed its prospectus on Form 424B4 with the SEC, which forms part of the Registration Statement. In the IPO, the Company sold 7,690,400 shares of Class A common stock at a price of $19.00 per share. The Company received net proceeds of approximately $132.5 million from the Offering. The proceeds from the IPO were purportedly to be contributed to Stronghold LLC in exchange for Stronghold LLC Units, and Stronghold LLC would purportedly use the net proceeds for general corporate purposes, including for acquisitions of miners and power generating assets.
 
On March 29, 2022, after the market closed, 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 declined by $3.28 per share, or approximately 32%, from $10.25 per share on March 29, 2022 to close at $6.97 per share on March 30, 2022.
 
The lawsuit alleges that the Registration Statement was materially false and misleading and omitted to state that: (1) contracted suppliers, including MinerVa, were reasonably likely to miss anticipated delivery quantities and deadlines; (2) 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; (3) as a result of the foregoing, there was a significant risk that Stronghold could not expand its mining capacity as expected; (4) as a result, Stronghold would likely experience significant losses; and (5) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
 

Stronghold Digital Mining, Inc. Investor Contact Form