Shares of Riot Platforms (ticker RIOT) popped more than 10% in Thursday's trading session amid news that activist investor Starboard Value has bought up a stake in the company.
Starboard Value wants Riot "to convert some of its bitcoin-mining facilities into capacity for so-called hyperscalers," The Wall Street Journal reports.
Hyperscalers operate large-scale data centers designed to handle massive amounts of computing power and storage capacity. The recent artificial intelligence boom has increased demand for data centers at a time when the latest Bitcoin halving event in April cut miners’ revenue in half, leading many to explore strategic alternatives. For example, fellow miner Core Scientific in June signed a 12-year deal with AI Hyperscaler CoreWeave worth up to $3.5 billion in total revenue.
"Starboard would like to see Riot take a similar path as bitcoin miner Core Scientific, which has been working with CoreWeave—an Nvidia-backed startup—to supply power infrastructure for the cloud-computing company’s operations," people familiar with the matter told WSJ.
Riot Platforms posted a net loss of $154.4 million in its recent third-quarter earnings report. The steep loss was driven by rising costs and unrealized investment losses, as the Bitcoin miner lowered its hash rate targets. Riot has also lowered its 2025 target from 56.6 EH/s to 46.7 EH/s.
“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 told WSJ.
In an interview with analysts from Bernstein this past fall, Riot Platforms CEO Jason Les said the company would be open to AI opportunities if the right deal came along.
Riot's stock was down 25% this year as the company attempted a hostile takeover of rival Bitfarms, which would have created the largest publicly traded bitcoin mining company. The two companies eventually reached a settlement whereby Riot is prohibited from acquiring more than 20% of Bitfarms without prior board approval.
At publication time, Riot shares were trading up 7.6% to $12.68. The company has a market cap of $4.2 billion.
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