Riot Platforms stock jumps 10% after activist firm Starboard takes a stake in the bitcoin miner
Dec 12, 2024 - markets.businessinsider.com
Riot Platforms' stock surged nearly 11% following news that activist investor Starboard Value has acquired a significant stake in the bitcoin mining company. Despite this single-day gain, Riot shares remain down 16% year-to-date, even as bitcoin prices have soared over 130% to record highs. Starboard is reportedly in discussions with Riot's management, proposing significant changes, including converting some bitcoin-mining facilities into data centers to support companies developing AI technologies. This strategic pivot is seen as a way to leverage Riot's existing infrastructure for new revenue streams, especially in light of the recent bitcoin "halving" event that reduced mining rewards.
The Wall Street Journal highlighted that Starboard's strategy for Riot mirrors the path taken by Core Scientific, which has successfully transitioned to providing infrastructure for AI startups like CoreWeave. Riot's management expressed a commitment to creating shareholder value and is open to discussions with Starboard. The move comes as Riot's shares are down about 80% from their peak in 2021, and competitor Marathon Holdings has also underperformed despite the broader bitcoin rally.
Key takeaways:
Riot shares surged nearly 11% after Starboard Value, an activist investor, acquired a significant stake in the company.
Starboard is proposing major changes for Riot, including converting some bitcoin-mining facilities into data centers for AI technology companies.
Despite the recent stock rally, Riot shares are still down 16% year-to-date and about 80% from their all-time high in 2021.
The move to pivot towards AI infrastructure is seen as a strategic opportunity for crypto mining companies following the recent bitcoin "halving" event.
