Greenidge stock slides as new CEO takes reins

DRESDEN -- Investors have been abandoning Greenidge Generation LLC's common stock since the sudden resignation of its CEO on Oct. 9.
The Bitcoin mining company's public shares have repeatedly sunk to new lows on the NASDAQ exchange since closing at $1.74 on the day Jeff Kirt was abruptly replaced by David Anderson, a forest products executive with no experience in cryptocurrency. As of Friday, those shares were worth less than half that, closing at 81 cents.
The stock's performance -- year-to-date it has plunged more than 95 percent -- reflects Greenidge's continuing struggle with environmental permit issues as well as a debt load that has turned net profits in 2021 into losses in 2022.
In a recent filing with the Securities and Exchange Commission, Greenidge blamed its lagging performance on the steep decline since last fall in the market value of one Bitcoin and a sharp uptick in the price of natural gas that fuels the power plant that drives its mining machines. In October of 2022, Bitcoin had a value of around $20,000 each, while last year at this time it was well above $60,000.
"Because there is a risk as to our ability to continue as a going concern for a reasonable period of time, an investment in our common stock is highly speculative," the company said in its second quarter 10Q filing with the SEC. "Holders of our common stock could suffer a total loss of their investment."
From the date of that filing on Aug. 15, the stock has lost 82 percent of its value.
The filing noted that the company has borrowed heavily at high interest rates to finance purchases of the latest Bitcoin mining "rigs" to compete with other cryptocurrency mining operations around the world.
Loans taken out between December 2020 and last October totaling more than $30 million carry interest rates of 15-17 percent, while bonds that raised $72.2 million carry rates of 8.5 percent, according to the 10Q.
As revenues from Bitcoin mining have shrunk this year, the company has made it a priority to improve liquidity needed to service the debt.
Meanwhile, Greenidge faces several environmental permit issues that have drawn the opposition of environmental groups.
In June, the state Department of Environmental Conservation denied the company's application to renew its Title V air emissions permit. The company promptly appealed within the DEC, a process that the company expects to take several years. The Bitcoin mining operation is allowed to continue under the terms of its expired air permit, pending the outcome of the appeal.
The company has also applied to renew its state water discharge permit, which expired Sept. 30. Greenidge failed to meet a key provision of that five-year-old permit: the installation of fish screens on its coolant water intake pipe in Seneca Lake.
The DEC has extended the company's deadline for installing a massive screen assembly at the end of the intake pipe, an environmentally sensitive project that will require dredging near sediment that has been shown to have high levels of Mercury.
Greenidge is also asking the DEC to renew a waiver it enjoys from a state regulation that prohibits companies from artificially raising the temperature of Seneca Lake by more than 3 degrees. Environmental groups have called for the agency to deny that waiver renewal.
That means Anderson, the new CEO, will face both regulatory and financial challenges.
Anderson had been president and CEO of Millar Western Products, a Canadian company controlled by Atlas Holdings LLC, which also controls Greenidge through its ownership of Class B stock, which carries voting rights.
Class A common shares (ticker symbol: GREE) were created last year when Atlas took Greenidge public through a reverse merger. Common share investors have no voting rights.
Greenidge said Anderson will team with Scott MacKenzie, Millar's vice president for corporate development who was named Greenidge's new "chief strategy officer."
A major portion of their compensation will be paid in the form of options on Greenidge's common shares, the company said: 1.85 million for Anderson and 1.22 million for MacKenzie. Since the announcement, the nominal value of those options has dropped by more than 50 percent.

PETER MANTIUS is a journalist based in Schuyler County. He covered business, law and politics at The Atlanta Constitution from 1983-2000. He has also served as the editor of business weeklies in Hartford, Connecticut and Long Island. Mantius publishes the webpage https://waterfrontonline.blog.