Northern Data loses $300m in capitalisation amid BaFin investigation

The capitalisation of German mining company Northern Data has fallen by almost $300m following reports of a BaFin investigation into its top executives. The latter are accused of market manipulation.

Northern Data shares are listed on the Deutsche Börse stock exchanges. On Friday, October 1, the stock fell by more than 30%. At the time of writing, the stock is trading near €56 - a week ago it was above €74.

Daily chart of NB2/EUR on electronic trading platform Xetra. Data: TradingView.
The company's capitalisation fell below €900m and it was valued at €1.21bn at the closing price on 30 September.

Speaking to the Financial Times, a BaFin spokesman confirmed that the regulator was investigating "potential market manipulation in the context of Northern Data", but declined to comment further.

According to the paper, the company's executives were charged after Northern Data published its preliminary results for the 2020 financial year. The firm reported a loss of €12.3m, although it had expected an operating profit in the range of €45-60m. Revenue was €16.4m against forecasts of €120-140m.

The company itself attributed this gap between the projected and real figures to the fact that it "failed to realise revenue from its two main customers".

A spokesperson for the Frankfurt prosecutor's office also told the FT that a complaint has been filed against Northern Data - the allegations relate to a "potentially misleading special release published by the company in November 2019".

Northern Data has denied the allegations of market manipulation. The company said the complaint relates to the announcement of the acquisition of bitcoin mining capacity provider Whinstone US. The latter was eventually bought by mining company Riot Blockchain.

Recall that in September 2021 Northern Data struck a deal with Bitfield, a mining firm, involving the purchase of at least an 86% stake and the indirect acquisition of some 33,000 ASIC miners.