Jul 24, 2024 12:25
MarathonDigital Holdings, Inc., the largest Bitcoin mining company by marketcapitalization, has been ordered to pay $138 million in damages following aunanimous jury verdict in a breach of contract lawsuit.
Marathon Digital Hit with$138 Million Verdict in Contract Breach Case
Theverdict, issued in a federal court, concluded that Marathon had breached anon-disclosure, non-circumvention agreement with Michael Ho, the Chief StrategyOfficer of Marathon's direct competitor, Hut 8.
Accordingto court documents, Ho entered into an agreement with Marathon in 2020 toprovide proprietary information regarding a large-scale energy supplier for thecompany's mining operations. The agreement stipulated that Marathon would notcircumvent Ho by directly engaging with the supplier without compensation.
The lawsuitalleged that Ho had developed a growth strategy for Marathon, including plansfor a large-scale Bitcoin mining facility in North America. Marathon wasaccused of executing this strategy without compensating Ho for the proprietaryinformation he provided.
Theunanimous jury verdict for $138 million vindicates Michael Ho's efforts andexpertise, and it reinforces the importance of honoring contractual obligationsand respecting professional relationships, explain David Affeld from AffeldEngland & Johnson LLP, who represented Ho.
JUST IN: A federal court jury *unanimously* ruled in favor of Michael Ho against $MARA @MarathonDH for $138M after finding that MARA breached a non-disclosure/non-circumvention agreement.Not good. If you cut corners you end up getting cut yourself. https://t.co/v1S2YoXbpp
RexFinance (@Rex_Finance)
July 20, 2024MARA Shares Show LittleReaction to Multimillion-Dollar Fine
Despite thesubstantial financial setback, Marathon Digital remains the world's largestBitcoin mining firm by market capitalization, valued at approximately $6.77billion. The company recently reported that it doubled its operational hashrateyear-over-year to 26.3 exahashes per second in June.
Wall Street investors responded little to news of the multimillion-dollarfine. During Monday's trading session, Marathon's shares (NASDAQ: MARA) fell by3% to just under $24, maintaining levels close to four-month highs. However,before today's session began, they lost an additional 2% in pre-market trading,testing the level of $23.46.
Last year, the company's revenue increased by 229%, reaching a record high of $388 million. Its net income saw a substantial increase, reaching $261.2 million, equivalent to $1.06 per diluted share, which marked a significant recovery from the loss reported the previous year. Additionally, the adjusted EBITDA grew notably, totaling $419.9 million.
For comparison, thesecond-largest crypto miner listed on Wall Street, also on NASDAQ, RiotPlatforms, has a significantly smaller market capitalization of around $3.2billion,
This article was written by Damian Chmiel at www.financemagnates.com.
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