Shares of Hut 8 Mining Corp (NASDAQ:HUT) plummeted 5.02% in Tuesday's trading session, as investors expressed concerns over the company's latest earnings report. Despite posting solid profits, underlying issues with cash flow and share dilution have seemingly overshadowed the positive headline numbers.

According to a detailed analysis of Hut 8's financial results, the company reported a statutory profit of US$204.0 million. However, this figure was undermined by negative free cash flow of US$290 million over the past twelve months. The significant discrepancy between profit and cash flow has raised red flags among investors about the quality and sustainability of the company's earnings.

Adding to the concerns, Hut 8 issued 16% more new shares over the last year, diluting existing shareholders' stakes. This dilution has resulted in earnings per share actually declining by 17% over the same period, despite the overall profit increase. The combination of cash flow issues and share dilution appears to have shaken investor confidence, leading to today's sharp sell-off.