Riot Platforms Targeted by Kerrisdale Capital's Short Sell Report: Details (UPDATED)
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 05 2024
0mins
Should l Buy RIOT?
Source: Benzinga
- Riot Platforms, Inc RIOT Shares: Trading lower after Kerrisdale Capital's report expressing a bearish view on the stock due to its focus on energy arbitrage and stock issuance over generating shareholder value through crypto mining.
- Concerns Raised by Analyst: Bitcoin mining is criticized for being a poor business model for public companies due to unpredictable revenue, high capital requirements, fierce competition, commodity nature of the product, and regulatory scrutiny.
- Issues Highlighted: Riot has never shown positive cash flow or decent returns, with excessive management compensation and frequent dilution of shares.
- Texas Regulatory Environment: Texas' lenient regulatory environment for Bitcoin miners is changing due to concerns over environmental impact, leading to increased oversight and legislation that could affect financial incentives.
- Response from Riot Platforms: Riot disagreed with the negative characterization, stating confidence in their growth plans and financial performance, while the analyst suggested better Bitcoin exposure options exist through low-fee ETFs and ETPs.
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Analyst Views on RIOT
Wall Street analysts forecast RIOT stock price to rise
9 Analyst Rating
9 Buy
0 Hold
0 Sell
Strong Buy
Current: 14.200
Low
20.00
Averages
27.00
High
42.00
Current: 14.200
Low
20.00
Averages
27.00
High
42.00
About RIOT
Riot Platforms, Inc. is a Bitcoin mining and digital infrastructure company. The Company has Bitcoin mining operations in central Texas and Kentucky, and electrical engineering and fabrication operations in Denver, Colorado, and Houston, Texas. It operates a Bitcoin-driven infrastructure platform. Its segments include Bitcoin Mining and Engineering. The Bitcoin Mining segment is engaged in Bitcoin mining activities. The Engineering segment designs and manufacturers power distribution equipment and custom engineered electrical products. This segment also provides electricity distribution product design, manufacturing, and installation services primarily focused on large-scale commercial and governmental customers and serves clients across a range of markets including data center, power generation, utility, water, industrial, and alternative energy. It is also focused on developing a portion of its power capacity for artificial intelligence (AI)/ high-performance computing (HPC) uses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Riot Platforms Stock Rises Amid Earnings Anticipation
- Bitcoin Holdings: Riot Platforms currently holds over 18,000 Bitcoins, valued at more than $1.2 billion at current prices, providing substantial support for stock volatility and reflecting the significant impact of the active Bitcoin market on the company's financial health.
- Earnings Release Announcement: The company announced it will release its Q4 and full-year financial results on February 24, with investors eagerly anticipating the implications of its transition from a Bitcoin miner to a data center and AI infrastructure player, which could positively affect future profitability.
- Land Purchase Agreement: Riot has entered into a land purchase and lease agreement for approximately 200 acres in Texas with AMD, which will utilize the land for its high-performance computing needs, potentially enhancing Riot's long-term earnings power, especially if forward earnings and EBITDA guidance improve in the upcoming financial commentary.
- Market Optimism: Despite the recent weakness in AI-related stocks, investors are taking a relatively bullish view of Riot, as evidenced by a 5.3% increase in stock price over the past five trading days, indicating confidence in the company's future developments.
See More
Riot Platforms Stock Rises 5.3% Amid Bitcoin Volatility
- Bitcoin Holdings: Riot Platforms holds over 18,000 Bitcoins on its balance sheet, valued at more than $1.2 billion, providing substantial support for the stock price, particularly during Bitcoin's price fluctuations.
- Earnings Release Announcement: The company announced it will release its Q4 and full-year financial results on February 24, with investors eagerly anticipating whether Riot's transition from a Bitcoin miner to a data center and AI infrastructure player will be viewed positively by the market.
- Land Purchase Agreement: Riot has entered into a land purchase and lease agreement for approximately 200 acres in Texas with AMD, which will utilize the land for its high-performance computing needs; this partnership could significantly enhance Riot's long-term earnings potential, especially in the upcoming financial commentary.
- Market Sentiment: Although Riot was not included in The Motley Fool Stock Advisor's list of top investment stocks, investor sentiment remains relatively bullish, particularly as Bitcoin prices continue to rise, suggesting a potential improvement in market perception of Riot's future.
See More
Riot Platforms Stock Surges 5.3% Amid Key AMD Deal
- Stock Surge Drivers: Riot Platforms' stock surged 5.3% this week, primarily driven by a land purchase and lease agreement with AMD, which will support AMD's high-performance computing needs, thereby enhancing market expectations for Riot's long-term earnings potential.
- Bitcoin Holdings Impact: Riot currently holds over 18,000 Bitcoins, valued at more than $1.2 billion at current prices, providing strong support for the company's stock price, especially amid Bitcoin's price volatility.
- Upcoming Earnings Report: The company is set to release its Q4 and full-year financial results on February 24, with investors keenly watching this report to assess the implications of Riot's transition from a Bitcoin miner to a data center and AI infrastructure player.
- Market Outlook: Despite the weak performance of AI-related stocks, analysts generally view Riot's transition as potentially positive, particularly given Bitcoin's strong performance, which may attract more investor interest.
See More
U.S. Stocks Close Higher as Software Stocks Recover
- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
- Metal Stocks Retreat: Reports of the Trump administration's plans to narrow tariffs on steel and aluminum products led to declines in metal companies, with Century Aluminum falling over 7%, reflecting the negative impact of policy changes on the sector.
See More
US Stocks Edge Up, Led by Chipmakers' Gains
- Chipmaker Rebound: Applied Materials (AMAT) reported Q1 adjusted EPS of $2.38, surpassing the consensus of $2.21, leading to a 10% stock price increase that helped lift the broader market, indicating strong recovery potential in tech stocks.
- Inflation Data Impact: The US January CPI rose 2.4% year-over-year, below the expected 2.5%, which may prompt the Fed to continue cutting rates, with the 10-year T-note yield falling to 4.05%, providing support for the market.
- Earnings Performance: Over two-thirds of S&P 500 companies have reported earnings, with 76% exceeding expectations, and Q4 earnings growth is projected at 8.4%, demonstrating corporate resilience and restoring market confidence.
- Market Sentiment Fluctuations: Despite the overall market rise, concerns over AI persist, putting pressure on certain stocks, particularly in tech and logistics, reflecting investor caution regarding future economic prospects.
See More
U.S. Stocks Plunge as Tech Sector Weighs Down Market
- Tech Sector Retreat: U.S. stocks experienced a significant decline on Thursday, with the S&P 500 down 1.57%, the Dow Jones down 1.34%, and the Nasdaq 100 down 2.04%, primarily driven by a sell-off in the Magnificent Seven tech stocks, indicating concerns over the profitability outlook in the tech sector.
- Cisco Systems Warning: Cisco Systems saw its stock plummet over 12% after forecasting that rising memory chip prices would erode profitability, raising investor concerns about future performance and potentially diminishing market confidence.
- Weak Economic Data: Initial jobless claims in the U.S. fell by 5,000 to 227,000, below the expected 223,000, while January existing home sales dropped 8.4% month-over-month to 3.91 million, marking a 16-month low, which reflects signs of economic slowdown that could impact market sentiment.
- Positive Earnings Season: Despite the overall market downturn, over 76% of S&P 500 companies that reported earnings exceeded expectations, with Q4 earnings projected to grow by 8.4%, indicating strong corporate profitability that may provide support for the market.
See More
Riot Platforms Stock Rises Amid Earnings Anticipation
- Bitcoin Holdings: Riot Platforms currently holds over 18,000 Bitcoins, valued at more than $1.2 billion at current prices, providing substantial support for stock volatility and reflecting the significant impact of the active Bitcoin market on the company's financial health.
- Earnings Release Announcement: The company announced it will release its Q4 and full-year financial results on February 24, with investors eagerly anticipating the implications of its transition from a Bitcoin miner to a data center and AI infrastructure player, which could positively affect future profitability.
- Land Purchase Agreement: Riot has entered into a land purchase and lease agreement for approximately 200 acres in Texas with AMD, which will utilize the land for its high-performance computing needs, potentially enhancing Riot's long-term earnings power, especially if forward earnings and EBITDA guidance improve in the upcoming financial commentary.
- Market Optimism: Despite the recent weakness in AI-related stocks, investors are taking a relatively bullish view of Riot, as evidenced by a 5.3% increase in stock price over the past five trading days, indicating confidence in the company's future developments.
See More
Riot Platforms Stock Rises 5.3% Amid Bitcoin Volatility
- Bitcoin Holdings: Riot Platforms holds over 18,000 Bitcoins on its balance sheet, valued at more than $1.2 billion, providing substantial support for the stock price, particularly during Bitcoin's price fluctuations.
- Earnings Release Announcement: The company announced it will release its Q4 and full-year financial results on February 24, with investors eagerly anticipating whether Riot's transition from a Bitcoin miner to a data center and AI infrastructure player will be viewed positively by the market.
- Land Purchase Agreement: Riot has entered into a land purchase and lease agreement for approximately 200 acres in Texas with AMD, which will utilize the land for its high-performance computing needs; this partnership could significantly enhance Riot's long-term earnings potential, especially in the upcoming financial commentary.
- Market Sentiment: Although Riot was not included in The Motley Fool Stock Advisor's list of top investment stocks, investor sentiment remains relatively bullish, particularly as Bitcoin prices continue to rise, suggesting a potential improvement in market perception of Riot's future.
See More
Riot Platforms Stock Surges 5.3% Amid Key AMD Deal
- Stock Surge Drivers: Riot Platforms' stock surged 5.3% this week, primarily driven by a land purchase and lease agreement with AMD, which will support AMD's high-performance computing needs, thereby enhancing market expectations for Riot's long-term earnings potential.
- Bitcoin Holdings Impact: Riot currently holds over 18,000 Bitcoins, valued at more than $1.2 billion at current prices, providing strong support for the company's stock price, especially amid Bitcoin's price volatility.
- Upcoming Earnings Report: The company is set to release its Q4 and full-year financial results on February 24, with investors keenly watching this report to assess the implications of Riot's transition from a Bitcoin miner to a data center and AI infrastructure player.
- Market Outlook: Despite the weak performance of AI-related stocks, analysts generally view Riot's transition as potentially positive, particularly given Bitcoin's strong performance, which may attract more investor interest.
See More
U.S. Stocks Close Higher as Software Stocks Recover
- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
- Metal Stocks Retreat: Reports of the Trump administration's plans to narrow tariffs on steel and aluminum products led to declines in metal companies, with Century Aluminum falling over 7%, reflecting the negative impact of policy changes on the sector.
See More
US Stocks Edge Up, Led by Chipmakers' Gains
- Chipmaker Rebound: Applied Materials (AMAT) reported Q1 adjusted EPS of $2.38, surpassing the consensus of $2.21, leading to a 10% stock price increase that helped lift the broader market, indicating strong recovery potential in tech stocks.
- Inflation Data Impact: The US January CPI rose 2.4% year-over-year, below the expected 2.5%, which may prompt the Fed to continue cutting rates, with the 10-year T-note yield falling to 4.05%, providing support for the market.
- Earnings Performance: Over two-thirds of S&P 500 companies have reported earnings, with 76% exceeding expectations, and Q4 earnings growth is projected at 8.4%, demonstrating corporate resilience and restoring market confidence.
- Market Sentiment Fluctuations: Despite the overall market rise, concerns over AI persist, putting pressure on certain stocks, particularly in tech and logistics, reflecting investor caution regarding future economic prospects.
See More
U.S. Stocks Plunge as Tech Sector Weighs Down Market
- Tech Sector Retreat: U.S. stocks experienced a significant decline on Thursday, with the S&P 500 down 1.57%, the Dow Jones down 1.34%, and the Nasdaq 100 down 2.04%, primarily driven by a sell-off in the Magnificent Seven tech stocks, indicating concerns over the profitability outlook in the tech sector.
- Cisco Systems Warning: Cisco Systems saw its stock plummet over 12% after forecasting that rising memory chip prices would erode profitability, raising investor concerns about future performance and potentially diminishing market confidence.
- Weak Economic Data: Initial jobless claims in the U.S. fell by 5,000 to 227,000, below the expected 223,000, while January existing home sales dropped 8.4% month-over-month to 3.91 million, marking a 16-month low, which reflects signs of economic slowdown that could impact market sentiment.
- Positive Earnings Season: Despite the overall market downturn, over 76% of S&P 500 companies that reported earnings exceeded expectations, with Q4 earnings projected to grow by 8.4%, indicating strong corporate profitability that may provide support for the market.
See More
