Riot shares rise 10% after Starboard stake announcement

Activist investor Starboard Value has acquired a significant position in Bitcoin (CRYPTO:BTC) miner Riot Platforms, aiming to unlock the company's potential amidst the growing demand for artificial intelligence (AI) infrastructure.

The Wall Street Journal reported the development, which boosted Riot’s stock price by over 10% on December 12.

Starboard Value has reportedly urged Riot to consider repurposing some of its Bitcoin mining capacity for hyperscale computing, catering to the increasing number of large data center users driven by the AI boom.

“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,” Riot Platforms acknowledged discussions with Starboard.

The shift toward high-performance computing and AI integration is not unprecedented in the cryptocurrency mining sector.

Firms like Bit Digital, Core Scientific, and Hive Digital have already transitioned some of their operations to mixed-use facilities, combining cryptocurrency mining with AI-driven services.

However, Riot Platforms, along with MARA and Cleanspark, has thus far resisted this trend.

Adding to its strategic moves, Riot recently announced plans to raise $500 million through senior convertible notes, intending to invest further in Bitcoin acquisitions.

This aligns with similar strategies adopted by several publicly traded Bitcoin miners and data centers.

Despite these developments, Riot's stock performance has been volatile in 2023.

It reached a peak of $17.64 in February but fell to a low of $6.38 in September.

The recent Starboard Value announcement, however, provided a much-needed boost, with the stock closing at $12.33, up 4.8% on December 12.

Starboard’s involvement signals a potential pivot for Riot Platforms, possibly marking its entry into AI-driven infrastructure, a move that could reshape its operational focus and long-term growth trajectory.