Terawulf (WULF) Loses 12.8% on AI Concerns, Bitcoin Fall

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Terawulf Inc. (NASDAQ:WULF) experienced a significant decline on Monday, with the stock falling by 12.84 percent to close at $12.49 per share. The drop in Terawulf’s stock price was attributed to several factors, including a decline in Bitcoin prices and renewed concerns about an AI bubble.

The price of Bitcoin was down by 2.27 percent at $86,168 per coin, as traders took early profits ahead of the Christmas holiday. This downward trend in Bitcoin prices had a negative impact on Terawulf’s stock performance.

Investor sentiment towards Terawulf was also affected by concerns about heavy spending on artificial intelligence. Technology giant Oracle Corporation’s massive debt of $108 billion from its investments in AI raised questions about the company’s ability to recoup its investments. This led to a broader selloff in high-performance computing companies, including Terawulf Inc.

Additionally, investors were trimming their positions in Terawulf due to the dilution impact of the company’s mandatory conversion of preferred shares into common shares. All convertible preferred shares of the company were converted into 141.9483 common shares effective on December 9.

Chief Finance Officer Patrick Fleury commented on the mandatory conversion, stating that it reinforces the company’s financial discipline and enables focus on growth moving forward. He emphasized that this announcement represents a key milestone in simplifying Terawulf’s capital structure and providing transparency to investors.

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In conclusion, Terawulf Inc. faced selling pressure on Monday due to a combination of factors, including declining Bitcoin prices, concerns about an AI bubble, and the mandatory conversion of preferred shares. Investors should carefully consider their investment decisions in light of these developments.

Disclosure: None. This article was originally published on Insider Monkey.