IREN drops 10% on $700M CEO stock grant diluting 5% of shares

IREN awarded its co-CEOs 18.2 million restricted stock units worth about $700 million, sending shares down 10 percent. The grant locks the founders' compensation through fiscal 2033 and bars new equity awards until fiscal 2031.

"The Equity Grants are designed to retain and incentivize the Co-CEOs to lead the Company through its next phase of growth and the execution of its long-term strategic plan," IREN said in its July 1 filing.

The board approved 9,099,328 units for each brother on June 30. The units vest over four years at 25 percent annually, with each tranche subject to a two-year sale ban. The last shares come free only in fiscal 2033, and neither executive can receive another equity grant before fiscal 2031.

The grant represents roughly 5 percent of the company's outstanding shares. Short seller Jim Chanos estimated the award at 17 percent of IREN's projected cumulative adjusted net income from fiscal 2027 through 2030. The shares vest on time served, not performance.

IREN stock fell 10.39 percent to $38.82 on July 2, extending a nine-session losing streak that erased about $2.8 billion in market value from the June 26 close. The drop came despite the company's June 29 addition to the Russell 1000 Index. About 60.2 million shares traded on July 2, more than double the recent daily average.

The Roberts brothers, former Macquarie bankers who founded IREN in 2018, each hold one B Class share carrying 15 votes per ordinary share. In August, each founder held 2.3 percent of the equity but 21.8 percent of the vote, giving them combined control of nearly 44 percent. Those super-voting rights expire around November 2033 — the same year the last RSU tranches become tradeable. The Council of Institutional Investors recommends dual-class sunsets of seven years or fewer.

IREN has been retooling from Bitcoin mining toward AI compute, a pivot that has driven its share count from about 272 million last August to 341 million by March. The company claims 5 gigawatts of secured power across six sites, including 810 megawatts currently operational. In May, IREN struck a deal with Nvidia to collaborate on up to 5 gigawatts of AI infrastructure, with Nvidia receiving a five-year option to buy up to 30 million IREN shares at $70 each — 44.5 percent above Thursday's close.

The grant locks the founders' incentives to the company's AI transition through the end of the decade. Whether the deal represents alignment or entrenchment depends on what the brothers deliver. Investors will watch the next quarterly update for signs of AI revenue traction and whether the stock can reclaim its pre-grant level above $43.

This article is for informational purposes only and does not constitute investment advice.