Riot Platforms stock jumps 10% after activist firm Starboard takes a stake in the bitcoin miner
Riot Platforms stock jumped on Thursday on news that Starboard Value, the activist investor that took a stake in Pfizer earlier this year, has amassed a significant position in the bitcoin miner.
Riot shares rallied almost 11% to trade around $13.02 each as of 11:43 a.m. ET. The move represents a big single-day gain for the company, which has seen its stock slump this year, even as bitcoin has rallied over 130% to record highs. Even with Thursday’s gain, Riot shares are down 16% year-to-date.
The Wall Street Journal reported that Starboard is in discussions with Riot’s management and is proposing big changes for the company, including turning some of its bitcoin-mining facilities into data centers for companies with big need for data centers, such as those developing artificial intelligence technologies.
The Journal added that the activist investor would push Riot toward a similar path taken by mining firm Core Scientific, which has been supplying the infrastructure resources for CoreWeave, an AI startup backed by Nvidia. Shares of Core Scientific have soared almost 370% this year.
With their sophisticated and powerful tools aimed at solving the complex computational problems required to mine bitcoin, crypto mining companies are well-placed to pivot to AI. It’s also a good time for miners to look for new cash flow opportunities following this year’s “halving,” a regular event in the bitcoin ecosystem that reduces the amount of bitcoin rewarded to miners by half.
“We are committed to creating value for all shareholders, and we look forward to constructive dialogue with Starboard on ways to achieve this shared goal,” the company said in a statement to The Journal.
Riot and Starboard did not immediately respond to a request for comment from B-17.
Riot shares are down about 80% from their all-time high in 2021. Competitor Marathon Holdings has also lagged the broader bitcoin rally, with shares about flat for the year.
