IREN Co-CEO Defends $6B Equity Plan As AI Boom Fuels Massive Data Center Spending: 'Likely To Deliver Outsized Returns'

• IREN Ltd. Co-CEO Daniel Roberts spoke on X Spaces to respond to market concerns.
• Roberts said the company would use all capital sources, including debt and customers' pre-payments, in a balanced way.
• Stocktwits sentiment has moved between 'bearish' and 'neutral' over the past week.

IREN Ltd. Co-CEO Daniel Roberts has defended the company's plan to raise up to $6 billion through equity, saying that it's an optional facility that the company would exercise while maintaining a balance among the various capital sources at its disposal, including debt and customer pre-payments.

Roberts, however, stressed that having the option is important. With demand for AI and data center compute surging, IREN would need continued capital investment from all sources to fully ride the growth wave, he argued.

Co-CEO Says Plans Accretive For IREN Shareholders

“We're all on this call because we believe that investing in the AI cycle, investing in a space where the demand, supply equations are so tilted, is likely to deliver outsized returns,” Roberts said in an X Spaces chat on Sunday, making a case for equity funding. 

Roberts added that he believes the issue would be accretive to shareholders, not dilutive, in the long run.

“We've raised $9.3 billion in the last eight months through prepayments, convertibles, GPU leasing, GPU financing. So it is about optionality and discipline... and should not be taken as an urgent need whatsoever to issue equity,” he said. 

IREN shares closed in the red on multiple days last week after the Australian bitcoin miner and contract data center operator disclosed plans to raise up to $6 billion through an at-the-market stock offering to fund its capacity expansion. It also simultaneously announced the purchase of 50,000 advanced graphics processing units (GPUs) from Nvidia Corp. 

Retail's View On IREN

Still, some pockets of the investor community are not entirely sold on the plan and fear equity dilution. On Stocktwits, retail sentiment for IREN was 'bearish' over the last week but shifted to 'neutral' from Wednesday, following the company announcing its capital raise plan.

“Any post here spouting Bear BS about dilution is either misinformed or a fear mongering loser. Keep calm and carry on,” a user said.

On X Space, Roberts said the majority of the capital raised by the company for AI deployments has come from structured financing and customer prepayments, rather than ATM issuances.“And looking ahead, we expect to continue funding and growth through a mix of those capital sources, customer prepayments, secured unsecured debt, etc.”

Having the flexibility and availability of equity if we need it is really important and avoiding equity altogether by overleveraging the balance sheet would be inconsistent with disciplined capital management, he said.

Regarding the Nvidia GPUs, he said IREN would have to pay for it only 30 days post shipping of the order.

IREN has emerged as a closely watched stock, given its exposure to AI data centers and bitcoin, two of the market's most closely tracked themes. In November, the company signed a $9.7 billion deal to offer its data centers to Microsoft, and a $5.8 billion purchase of data center equipment from Dell. 

After last week's selloff, IREN shares are down nearly 3% year to date.

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