“This was something I had never encountered and definitely wasn’t prepared for.”
Lori Love, formerly the CFO of CleanSpark, had a career-changing experience in her second and final CFO role. Her company had experienced rapid growth through a business pivot from energy solutions to bitcoin mining, and her team helped grow the business by nearly 40x in share price. However, the business pivot confused shareholders, attracted short sellers, and created a large group of people who became invested in the company's failure.
After trying to juggle all the moving parts of the business, its growth, and this pursuit by outside parties to inhibit success, Love mentally and physically reached a breaking point. She resigned after working at the company from late 2019 to early 2022.
Love now says she has no interest in ever being a CFO again.
A business pivot
CleanSpark’s shift to bitcoin mining wasn’t the first time the company had pivoted in its business model. The company originally started as a manufacturer of gasifiers — machines that take coal and other feedstock and turn it into a zero-emission gas, rather than putting carbon in the atmosphere. They then shifted to microgrids, which operate as failsafe and energy cost managers for larger electrical grids.
The shift to microgrids was the first step in difficulties for Love. After the demand for microgrids increased, and became more labor-intensive and internationally spanned projects, Love’s job, according to her, became difficult.
“These projects were long, and revenue recognition was hard,” she said. “As a [over-the-counter] company which then successfully uplisted to NASDAQ, it became a slog to recognize revenue in that type of business model. So we started to look at other opportunities of how we can grow revenue into other areas.
“We made a few acquisitions but then were presented with an opportunity to acquire a bitcoin mining company,” Love said. “Our thought process in the pivot was, we are an energy company, bitcoin mining is heavily reliant on energy, so how can we leverage what we can do in this space?”
Love said she and the executive team had limited knowledge about bitcoin mining at the time. However, after the CEO took a sales meeting with a bitcoin mining company that could use microgrids to back up their power-dependent mining systems, the scalability of CleanSpark through an acquisition into this space became evident.
“Our shareholders were confused, rightfully so, because we've been an energy company and now we are getting into bitcoin mining as a major part of the business."
Lori Love
Former CFO of CleanSpark
“We pivoted and acquired this company, and we were moving in a positive direction,” Love said. “Our shareholders were confused, rightfully so, because we've been an energy company and now we are getting into bitcoin mining as a major part of the business. [But], we were starting to make some traction and get real revenue in. Our stock went from a low of $1.00 to $42 in less than a year.”
As events began to unfold, Love’s skepticism alarms began to ring. “In my experience, when you see a jump like that, you [begin to] have people who are interested in manipulating your stock price,” she said.
The short report
In 2021, a research firm named Culper Research published a report alleging a variety of improprieties CleanSpark had committed.
“What ended up happening is we had a short report published against CleanSpark, and the stock price went down as a result,” she said. “Then, attorneys started advertising to shareholders to join a class action lawsuit against the company over this report. It was a mess.”
“For me, I knew [CleanSpark] did a lot of things right, and now all of a sudden, this short report came out. To this day, I categorically deny anything related to me in that report, as far as accusations are concerned, but we still had the stock price go down and lawsuits filed against the company. As CFO, there was a ton of risk for me involved, both personally and professionally.”
Multiple class action lawsuits were filed against CleanSpark. In the wake of the published report, the company launched an investigation against Culper Research, stating the accusations were false, it was published anonymously, and its purpose was to cover its own short positions.
“We had directors and officer’s insurance, but that stuff began to weigh on me,” she said. “It’s heavy stuff, dealing with attorneys and having the short report accuse me of failing to disclose certain things on a 10-K or Q; what do you say to that?”
The job took a physical and mental toll on Love as the burdens increased. “The stress was unbelievable. I was getting chest pains and migraines. My body was telling me to step back. I always give 150% in everything I do, and I couldn’t do that anymore as a CFO.” Love resigned in March of 2022.
CFO reached out to CleanSpark for comment, and the company’s current CFO, Gary Vecchiarelli, said, "I can’t comment on Lori’s time here as we never overlapped. But I’ve known Lori for a long time and think she is a talented accountant and leader.”
“I agree with her that being a CFO is not for everyone and that the stresses natural to the job, especially in a high-profile company, are real and require careful management and a specific skill set,” he continued. “CFO roles are as distinct and varied as the professionals who fill those roles."
Reflecting and learning
Through her experience in previous roles and education, Love said her experience at CleanSpark is not something she was prepared for or even heard of happening to anyone else.
“I had not heard of a company growing as we grew and, as a result, have people very interested in watching the stock price fall,” she said. “When I started at CleanSpark, our market cap was around $20 million. When our market cap went over a billion I was like, ‘Wow, we’ve done such an amazing thing here.’ But then I realized, people were after us as a company, and I felt personally attacked.”
As for now, Love’s work-life balance and career after being a CFO are much more focused on providing internal value to her current employer, working as a senior manager at Eide Bailly, and the board of directors she sits on at Bitmine Immersion Technologies. Although she is still dealing with legal matters from her time at CleanSpark, her new role is a much better fit for her personally and professionally.
“The deliverables and stresses of being a CFO is not something I deal with daily anymore,” she said. “I like working on process improvements and seeing the fruits of the labor in those tweaks. Improved margins, improved client service, better operations, that’s what gets me up in the morning now. I like to work, I’ll always work. But I’ll never be a CFO again.”