Jeffrey Kirt, CEO of Greenidge Generation Holdings LLC, abruptly resigned Friday from the Bitcoin mining company that has been reeling from financial losses, environmental controversy and a precipitous share price decline.
He was replaced on Saturday by a pair of executives from a Canadian forest products company affiliated with Atlas Holdings LLC, the Connecticut private equity group that owns a majority stake in Greenidge.
David Anderson will replace Kirt as CEO and Scott MacKenzie will join the company as chief strategy officer.
In a statement announcing the executive shakeup, the company also said it expected to report a net loss of $20 million to $22 million for the third quarter ended September 30. It reported a loss of $107.9 million in the second quarter.
Greenidge made his announcements after the stock market closed on Friday afternoon. Companies often try to bury bad news by revealing it before a long weekend.
Shares of Greenidge closed at $1.74 on Friday, a record low close, and fell further in after-hours trading.
Kirt, who joined the company in January 2021, said he was proud of the work the company did during his tenure, according to the company statement.
“We became a public company, strengthened our management team and workforce, significantly improved our fleet efficiency, expanded our geographic footprint, and identified several new opportunities for strategic growth,” Kirt said.
Tim Fazio, president of Greenidge, said the board thanked Kirt for his “steady leadership.” Kirt will also be leaving the Greenidge board, but will continue as a consultant to the company during the transition and will continue as a senior advisor to Atlas Holdings.
Greenidge’s statement on Friday did not mention whether Anderson or MacKenzie had any experience in the field of cryptocurrencies, Greenidge’s core business.
Anderson has served as President and CEO of Alberta, Canada-based company Millar Western Forest Products since January 2020. He joined the firm in 2008 and previously served as COO and CFO.
MacKenzie had served as vice president of corporate development at Millar Western since June 2019.
Atlas had bought a majority stake in Millar Western in 2017.
Greenidge’s statement said Anderson and MacKenzie would receive a stock award that “aligns them with Greenidge stockholders by tying a significant portion of their compensation to the upward trajectory of Greenidge’s (common) stock price.”
Anderson and MacKenzie are not scheduled to receive shares or Class B stock options, the holders of which have voting powers that actually control company decisions.
Greenidge common stock began trading on the NASDAQ market under the ticker symbol GREE last September.
Giving Anderson and MacKenzie options on more than 3 million Greenidge shares will tend to dilute the common stock, making it less attractive, the company acknowledged in its Friday statement.
Last month, Greenidge announced plans to sell up to $23 million in common stock, which would also dilute the portion of the proceeds applied to existing common shareholders. Dilution concerns are likely to contribute to share price erosion.
In August, the company said it intended to halt its planned expansion of Bitcoin mining in Texas due to a “sudden change in the mining economy.”
In addition to its Bitcoin facility in Dresden, the company also runs a smaller Bitcoin mining operation in South Carolina.
The company said its combined Bitcoin operations produced 278 Bitcoins in September, up from 301 in August. For the three months ending September 30, it said it produced 866, compared to 621 in the previous quarter.
But the collapse of the market price of one Bitcoin has caused Greenidge Bitcoin’s revenue to lag. Bitcoin price has dropped from $40,000 on April 25 to $19,400 today.
Greenidge is banking on solid crypto income earnings to cover the large debt incurred to purchase thousands of the latest Bitcoin mining rigs.
While the company faces intense financial pressure, its Dresden power plant has been embroiled in a number of environmental controversies.
On June 30, the state rejected its offer to renew its Title V air emissions permit for noncompliance with the 2019 state climate law. The company is appealing that decision to the Department of Environmental Conservation, a process that could take as long as years.
On September 30, the company’s water permit expired before it was able to satisfy a key provision: the installation of federally required fish screens on its cooling water inlet pipe. DEC recently extended the installation deadline until early next year.
Meanwhile, the company is seeking to extend a waiver for its violations of state rules on heating Seneca Lake with its massive discharges of heated water. Environmental groups oppose an extension of the thermal exemption.
The DEC said it is reviewing Greenidge’s application to renew its expired water permit and its offer to extend the exemption from the state thermal rules.
Peter is a three-time Pulitzer nominated reporter covering environmental issues through his first digital publication of its kind, The Water Front. He has won a number of awards from the Associated Press, UPI and the Society of Professional Journalist. His reporting on environmental issues continues to appear in leading New York publications and is available at FingerLakes1.com through an exclusive content partnership. Do you have any questions or clues? Send it to [email protected]