Bitfury founder locked $100 million before Cipher Digital's 53% drop; retail still bets on the AI pivot
Bitfury founder Valerijs Vavilovs locked in $100 million before Cipher Digital crashed, leaving retail bulls to face debt, dilution, and dealer supply.
Vincent Jiang · 3 min read
The founder who cashed out at the peak
Valerijs Vavilovs built Bitfury into an industrial crypto pioneer, but his cleanest trade was moving out of Cipher Digital−1.83% — Cipher Digital, down 1.83 percent today 1. On October 26, 2026, Vavilovs and his holding company, V3 Holding Ltd, handed over 1,805,000 common shares of Cipher Digital to an unaffiliated Wall Street dealer 1.
The delivery settled the second tranche of a variable prepaid forward sale contract struck on November 3, 2025, when the stock traded higher 1. Back then, V3 pocketed $100.0 million in immediate cash against an obligation to deliver up to 5,415,000 shares across three dates: September 25, 2026, October 23, 2026, and November 30, 2026 1.
Because Cipher shares cratered to an $8.11 settlement price on October 23, 2026—well below the contractual floor price of $21.4881—V3 had to deliver the maximum allowable 1,805,000 shares for the tranche 1. By locking in cash a year earlier, Vavilovs effectively realized $18.47 per share across the aggregate forward, securing liquidity at more than double Cipher's prevailing market price 1.
Vavilovs locked in prices more than double where the stock settled
Data
| Dollars per Cipher share | |
|---|---|
| Forward floor | $21.49 |
| V3 realized | $18.47 |
| Settlement price | $8.11 |
| Market close | $7.94 |
Retail buys the hype while debt mounts
On retail feeds across X, investors celebrate Cipher's pivot from bitcoin mining into artificial intelligence hosting as an asymmetric bargain 45. Bulls highlight a 20-year, $9 billion backlog at the Barber Lake facility backstopped by Alphabet+1.26% — Alphabet, up 1.26 percent today 6, pointing to $16.6 billion in total contracted AI lease revenue against trailing revenue of just $24.8 million in the second quarter of 2026 56.
Yet the balance sheet tells a harsher story. Total debt climbed to $5.59 billion in the second quarter of 2026, while quarterly capital expenditures reached $380 million to build out high-performance computing halls 7.
Capex accelerated past revenue as Cipher transitioned from bitcoin mining to AI data centers
- Capex
- Revenue
Data
| Capex | Revenue | |
|---|---|---|
| Q3 '24 | $0.18B | $0.02B |
| Q4 '24 | $0.08B | $0.04B |
| Q1 '25 | $0.1B | $0.05B |
| Q2 '25 | $0.12B | $0.04B |
| Q3 '25 | $0.05B | $0.07B |
| Q4 '25 | $0.23B | $0.06B |
| Q1 '26 | $0.53B | $0.04B |
| Q2 '26 | $0.38B | $0.03B |
The company absorbs the first $359.3 million of project cost overruns at Barber Lake before tenants reimburse half of excess expenses 6. In mid-October 2026, Cipher sold $850 million of zero-coupon convertible notes due 2032 and swapped older debt for 40.7 million common shares, expanding its share count by nearly 10% 6.
The supply wall before earnings
The market has priced in the strain. Cipher shares sank roughly 53% between late September and late October 2026, dropping to $7.94 on October 23, 2026 36. The company heads into its November 2, 2026, third-quarter earnings report needing to demonstrate that its Black Pearl site generated anticipated lease rent and that Barber Lake Phase 1 remains on schedule 36.
Meanwhile, dealer hedging from V3's forward contract looms over the stock 1. The dealer received 1,805,000 shares this week and will receive another tranche of up to 1,805,000 shares on November 30, 2026 1. Even after these deliveries, V3 and Bitfury retain 52,866,694 shares—roughly 10% of Cipher Digital 16. When the largest inside holder secures liquidity at $21.49 while retail buyers chase backlogs at $8, the tape reveals who is really paying for the concrete 16.
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