Riot Shares Surge Amid Potential AI Pivot

On December 12, Riot Platforms’ shares jumped nearly 5% following news of Starboard Value acquiring a stake in the bitcoin miner. Meanwhile, the S&P 500 index declined by 0.5% that day.

On Thursday morning, The Wall Street Journal reported that Starboard Value had acquired a “significant” stake in Riot.

The buyer is a well-known activist investor. Such firms acquire minority stakes and begin to influence company management in search of ways to increase shareholder value.

According to the publication, Starboard Value wants Riot to convert part of its mining capacity into hyperscalers. Demand for large-scale universal data centers has risen amid the AI boom.

“Starboard would like Riot to follow the same path as bitcoin miner Core Scientific, which collaborates with Nvidia-backed startup CoreWeave, providing energy infrastructure for cloud computing operations,” a source familiar with the situation confirmed to journalists.

Core expects to earn up to $3.5 billion under a 12-year contract with an AI firm.

In the third quarter, Riot reported a net loss of $154.4 million. This figure was mainly due to depreciation charges, stock compensation expenses, and unrealized losses on marketable equity securities.

Commercial, general, and administrative expenses for the quarter amounted to $66.9 million, $37.9 million more than the previous year.

During this period, the company generated total revenue of $84.8 million, with $67.5 million coming from mining.

Riot has lowered its year-end bitcoin hash rate forecast from 36.3 EH/s to 34.9 EH/s. For 2025, the expectation is now 46.7 EH/s instead of the previously anticipated 56.6 EH/s.

Riot’s share price has fallen by 20.3% since the beginning of the year, with a market capitalization of $4.1 billion.

Since May, the company has attempted a hostile takeover of rival Bitfarms, increasing its stake in the bitcoin miner.

In September, the parties reached a settlement without Riot gaining full control. Bitfarms’ shares have lost over 30% since the beginning of the year, reducing the company’s market value to $0.97 billion.

In April, CoinShares experts predicted that industry participants would compensate for revenue losses following the halving through AI expansion.

However, in October, JPMorgan analysts noted that miners have about nine months to secure profitable deals in the sector.