Why Iren Stock Plummeted by Nearly 10% on Friday

Although the performance of stocks never depends entirely on the opinions of analysts, those market professionals can have quite an impact at times. More than once this week, crypto mining company Iren (IREN -9.43%) experienced that dynamic.

Unfortunately, on Friday, this turned negative for the stock, and it lost almost 10% of its value. This occurred on a day for stocks that was broadly positive, with the benchmark S&P 500 index creeping up by 0.6%.

Downward adjustment

That’s because the day’s analyst take wasn’t positive. It came from Reginald Smith of JPMorgan Chase‘s corporate and investment banking unit, J.P. Morgan. Smith downgraded his recommendation on Iren from neutral to underweight (sell, in other words). He also cut his price target rather assertively, reducing it to $16 per share from his preceding $24.

Image source: Getty Images.

Worse, the pundit’s move was part of a broader analysis of Bitcoin mining stocks, in which he highlighted titles he feels have more potential.

In that report, Smith upgraded Riot Platforms to overweight (buy). He enacted another downgrade with CleanSpark; however, he only knocked this down to a neutral designation. This only served to highlight the new sell tag on the formerly neutral Iren.

Inflated expectations?

According to reports, the analyst’s change of sentiment on Iren is due to expectations for the company’s future expansion. He feels that the stock has priced in a large colocation deal which, if realized in the expected scope and scale, would set new records in the industry — particularly for capital expenditures.