Riot Platforms, one of North America's largest Bitcoin miners, is under pressure from investors to rethink its current business strategy and focus on leasing capacity to tech giants.
Riot's Struggles Amid Bitcoin Growth
Despite Bitcoin's remarkable 130% price increase this year, Riot's stock has declined by 24%. Shares are at $11.55, with a market value of $3.97 billion. The company also reported a record $304 million operating loss and SG&A expenses of $225 million, more than triple last year's spending.
Starboard’s Bold Proposal
Activist investor Starboard suggests Riot lease out unused capacities to companies like Amazon and Google, potentially yielding higher returns. Their Texas site has 600 MW idle capacity, which Starboard believes could generate $600 million in annual revenue.
A Proven Strategy in the Industry
Competitors like Core Scientific have already explored this avenue, sealing a $8.7 billion deal with CoreWeave. Similarly, Hive Digital and Hut 8 have adopted the hyperscaler model, achieving substantial stock growth this year.
Starboard's proposal gives Riot a chance to diversify income sources and maintain competitiveness. Shifting to capacity leasing could offer a more sustainable growth path for the company.
