Cipher Mining’s stock price has tumbled by 6% despite most of the bitcoin mining stocks are seeing small gains on Wednesday.
Cipher Mining opened the market with a 6% gain and reached $2.85, but its stock price began falling shortly after its major shareholder Bitfury issued a note about a share distribution plan. It is changing hands at $2.57 as of writing.
According to Bitfury’s statement and Cipher’s filing with the SEC, Bitfury has won its shareholders’ approval to distribute 16.1 million shares of Cipher to Bitfury’s Series C investors.
“Following this initial step, Bitfury is exploring the opportunity to distribute approximately 126 million shares of Cipher to Bitfury’s remaining shareholders as a second step,” Bitfury said in the note.
If the second step is complete, Bitfury would still retain 50 million shares of Cipher and its stake would be reduced from 75% to less than 20%.
Bitfury said the purpose is to “reduce ownership concentration and create a more diversified and normalized shareholder base for Cipher” but it appears the plan is not well received by market participants so far.
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The equity distribution plan comes two months after Bitfury sold 10 million shares of Cipher at a price of $2.93. In the November statement, Bitfury said it was holding 192 million shares of Cipher, representing 75.37%. It entered into a 60-day lock-up period, under which it may not sell or transfer any shares before Jan. 15.
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