 ▲ Bitcoin (BTC) Mining / AI-Generated Image © |
An activist investor has argued that Riot Platforms, a U.S.-listed Bitcoin (BTC) mining company, must move more urgently to seize the significant opportunity presented by transitioning to AI data centers. If executed successfully, the shift could increase the company’s value by up to $21 billion, potentially driving its stock price up more than 240%.
According to crypto-focused media outlet Decrypt on February 19 (local time), Peter Feld, managing member of activist investment firm Starboard Value, sent a letter to Riot’s CEO and board chair emphasizing that the company could generate substantial value by developing AI data centers that support the high-performance computing industry. He noted that Riot is positioned to streamline non-core operations and cut costs to focus on its AI and high-performance computing strategy, but urged the company to accelerate governance and operational reforms to fully capitalize on this strategic shift.
Recently, several publicly traded mining companies have been attempting to pivot into the AI sector by leveraging the abundant power available at their existing mining facilities. Riot signed its first data center agreement with AMD in January and previously sold approximately $200 million worth of Bitcoin to help finance its expansion. While Riot stated in its third-quarter earnings release that its approach to Bitcoin mining has evolved, Starboard argued that the company’s pace remains slower than that of its competitors.
Feld pointed out that Riot’s stock performance has significantly lagged behind rivals that secured multi-billion-dollar AI and high-performance computing contracts backed by major corporations such as Google. However, he stressed that Riot has the potential to secure higher-quality agreements than its peers due to the attractiveness of its sites, adding that the company must act with greater speed and urgency than ever before.
Based on its own estimates, Starboard Value projected that the equity value generated by AI and high-performance computing data centers at Riot’s Corsicana and Rockdale sites could range from $9 billion to as much as $21 billion. This figure far exceeds Riot’s current market capitalization, and when factoring in the company’s net cash position, the firm’s fair stock value is estimated to be between $23 and $53 per share.
On Wednesday, Riot shares closed at $15.49, up about 6% from the previous trading day. Although the stock has risen more than 25% over the past six months, reaching Starboard’s $53 price target would represent an additional gain of approximately 242% from current levels for shareholders.
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