IREN stock is crashing and it's not entirely about the Meta threat

IREN stock is crashing this morning, and the sell-off is being attributed primarily to Meta Platforms' reported plans to launch a commercial cloud infrastructure business.

But a deeper dive reveals there’s actually more to the story that’s disappointing investors on Jul. 2 – adding to pressure on the name that’s now down an alarming 45% versus its high in late May.

What’s really hurting IREN stock today

IREN stock is tumbling at writing mostly because a regulatory filing late on Wednesday revealed a rather huge $800 million restricted stock unit (RSU) grant to its Co-CEOs – William and Daniel Roberts.

Investors are reeling from the size of the payout, especially since it represents roughly 17% of the firm’s estimated cumulated adjusted net income all the way from FY27 to FY30, according to short seller Jim Chanos.

For a company that has already heavily diluted its equity base recently (via a $3 billion convertible note offering and a $6 billion ATM program) to fund its data center footprint – handing out nearly a billion in stock grants to insiders feels like a slap in the face to retail and institutional shareholders.

Note that IREN is also facing technical selling pressure, having crashed through its major moving averages (MAs) recently.

What else is weighing on IREN shares

The RSU grant to Co-CEOs is bearish for IREN shares, particularly because the company recently announced a $50 million a year jersey-patch sponsorship deal with the Golden State Warriors as well.

Investors have a bone to pick with that richest sponsorship deal in North American sports history because they want to see IREN deploying capital into data center build-outs, power procurement, and scaling its $3.4 billion Nvidia cloud contract.

To them, spending tens of millions of dollars on a massive consumer-facing sports brand feels like a costly distraction when the firm’s primary targets have traditionally been hyperscalers.

What’s also worth mentioning is that IREN’s relative strength index (RSI) is hovering around 31 currently, which means the stock hasn’t officially slipped into the “oversold” territory yet.

Meta announcement remains a threat for IREN

The aforementioned concerns are adding to pressure from META’s plans of beginning to rent out its excess AI infrastructure and GPU capacity to third-party enterprise customers.

Such a service, internally dubbed Meta Compute, stands to hurt IREN stock right where it hurts.

Investors are realizing that the “supply-constrained hyper-growth period” for GPU rentals is facing a massive new competitor with virtually infinite capital.

When a titan like Meta Platforms Inc decides to monetize its own infrastructure stack, it threatens to compress rental margins across the board.

That said, Wall Street remains bullish as ever on IREN, with a Moderate Buy rating tied to an $81 mean price target that signals potential upside of more than 100% from here.