Greenidge’s CEO, Jeff Kirt, Abruptly Resigns as Company Reels Financially; Canadian Forestry Exec Replaces Him

DRESDEN, Oct. 9, 2022 — Jeffrey Kirt, Greenidge Generation Holdings LLC’s chief executive officer, abruptly resigned Friday from the Bitcoin mining company that has been reeling from financial losses, environmental controversy and a plummeting stock price.

He was replaced Saturday by a pair of executives at a Canadian forest products company affiliated with Atlas Holdings LLC, the Connecticut private equity group that owns a controlling interest in Greenidge.

David Anderson will replace Kirt as chief executive officer, and Scott MacKenzie will join the company as chief strategy officer.

In a statement announcing the executive shuffle, the company also said it expected to report a net loss of $20 million to $22 million for the third quarter ended Sept. 30. It reported losing $107.9 million in the second quarter.

Greenidge made its announcements after the stock market closed Friday afternoon. Companies often attempt to bury bad news by revealing it before a long weekend.

Greenidge shares closed at $1.74 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 accomplished during his tenure, according to the company statement.

“We’ve become 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, Greenidge’s chairman, said the board thanked Kirt for his “steady leadership.” Kirt will also leave the Greenidge board, but he will continue as a consultant to the company during the transition and continue as a senior advisor to Atlas Holdings.

David Anderson

Greenidge’s statement Friday did not mention whether Anderson or MacKenzie had any experience in the cryptocurrency field, Greenidge’s core business.

Anderson has served as president and CEO of Millar Western Forest Products company based in Alberta, Canada, since January 2020. He began working for the firm in 2008 and had previously served as chief operating officer and chief financial officer. 

MacKenzie had served as vice president for corporate development at Millar Western since June 2019. 

Atlas had purchased a controlling interest in Millar Western in 2017.

The Greenidge statement said Anderson and MacKenzie would receive an equity award that “aligns (them) with Greenidge’s shareholders by making a meaningful portion of their compensation tied to the upward trajectory of Greenidge’s (common) stock price.”

Anderson and MacKenzie aren’t scheduled to receive any shares or options of Class B stock, whose holders have voting powers that actually control company decisions.

Greenidge common shares began trading on the NASDAQ market under the ticker symbol GREE last September.

Awarding Anderson and MacKenzie options on more than 3 million Greenidge shares will tend to dilute the common shares, making them less attractive, the company acknowledged in its statement Friday.

Last month Greenidge announced plans to sell up to $23 million in common stock, which would also dilute the share of earnings applied to existing common shareholders. Dilution concerns are likely contributing to the erosion of the share price.

In August the company said it intended to pause its planned expansion of Bitcoin mining into Texas due to a “sudden change in mining economics.” 

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, down from 301 in August. For the three months ended Sept. 30, it said it produced 866, compared with 621 in the previous quarter.

But the collapse of the market price for one Bitcoin has cause Greenidge Bitcoin revenue to lag. The Bitcoin price has dropped from $40,000 on April 25 to $19,400 today.

Greenidge counts on robust cryptocurrency revenue gains to cover heavy debt incurred to buy thousands of the latest Bitcoin mining rigs.

While the company contends with intense financial pressures, its Dresden power plant has been mired in a series of environmental controversies.

On June 30, the state denied its bid to renew its Title V air emissions permit for failure to comply with the state’s 2019 climate act. The company is appealing that decision within the Department of Environmental Conservation, a process that could drag on for years.

On Sept. 30, the company’s water permit expired before it managed to satisfy a key provision: the federally required installation of fish screens on its coolant water intake pipe. The DEC recently extended the installation deadline into early next year.

Meanwhile, the company is seeking to extend a waiver for its violations of state rules on warming Seneca Lake with its massive discharges of warmed water. Environmental groups object to an extension of the thermal waiver.

The DEC said it is reviewing both Greenidge’s application to renew its expired water permit and its bid to extend the waiver of state thermal rules.

2 Comments

  1. I liked the little detail tucked into the story about companies burying bad news on Friday afternoons – but it didn’t get by the Waterfront Blog 🙂

    Like

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