Bitcoin Miner Riot Platforms Sees 10% Stock Surge as Activist Investor Starboard Buys In

In a striking development for Riot Platforms, the company saw its stock climb by nearly 11% on Thursday.

This jump to about $13.02 per share comes after the announcement that activist investor Starboard Value has taken a notable stake in the bitcoin mining enterprise.

Riot’s financial performance has been lackluster this year, with shares down 16% year-to-date despite the news.

This is in sharp contrast to the broader cryptocurrency market, where bitcoin has seen an impressive rally, soaring over 130% to reach record highs.

Starboard, known for its recent investment in Pfizer, is now proposing strategic changes for Riot.

According to a report by The Wall Street Journal, discussions are ongoing with Riot’s management to potentially transform some of its bitcoin-mining operations into data centers.

These facilities would cater to companies with substantial data requirements, particularly those in the artificial intelligence sector.

The investor is pushing for a strategic pivot similar to that of Core Scientific, a mining firm that has provided infrastructure for CoreWeave, an AI startup backed by Nvidia.

Following this strategic shift, shares of Core Scientific have skyrocketed by nearly 370% this year.

The timing for such changes is opportune as the bitcoin mining industry faces the ‘halving’ event, which slashes the bitcoin reward for miners by half, necessitating new revenue streams.

In a statement to The Journal, Riot expressed its commitment to enhancing shareholder value and its openness to constructive dialogue with Starboard. Neither Riot nor Starboard responded immediately to requests for comment from Business Insider.

Despite the recent gains, Riot’s shares still lag significantly, remaining about 80% below their peak in 2021. In comparison, Marathon Holdings, a competitor in the bitcoin mining sector, has seen its shares remain stagnant over the year.