Riot Platforms is once again under scrutiny from an activist investor. Investment firm D.E. Shaw has reportedly acquired a stake in the Bitcoin mining company and is pushing for changes, according to a Reuters report on January 29.
D.E. Shaw’s Influence and Riot’s Ongoing Challenges
D.E. Shaw, a Manhattan-based investment firm managing $70 billion in assets, has not disclosed the size of its stake in Riot Platforms. However, the firm is known for its strategic and discreet approach to influencing companies, often negotiating privately with executives rather than making public demands.
This marks the second activist investor to target Riot in recent months. Hedge fund Starboard Value took a significant position in the company last year and has been advocating for Riot to repurpose some of its Bitcoin mining operations to support large-scale data center users amid the growing demand for artificial intelligence (AI) computing power. Riot has confirmed discussions with Starboard on this matter.
AI Integration and Strategic Shifts in Bitcoin Mining
As Bitcoin mining becomes more competitive and energy-intensive, several mining firms have started reallocating resources to support AI ventures. Riot recently announced a formal evaluation of shifting 600 megawatts of power at its Corsicana, Texas, facility to support AI and high-performance computing. Currently, 400 megawatts of power at the site are dedicated to Bitcoin mining.
This shift aligns with a broader industry trend where crypto miners are seeking alternative revenue streams as AI-driven businesses surge in value.
Riot’s Stock Performance and Industry Outlook
On January 29, Riot’s stock (RIOT) rose nearly 2.5% to $11.22, ending a two-day losing streak seen across the crypto mining sector, according to Google Finance. However, after-hours trading saw a slight decline of nearly 0.3%.
Despite being up nearly 10% in 2024, RIOT has faced challenges over the past year, with its stock down nearly 3% as the company struggles to achieve net income.
The crypto industry remains optimistic about potential regulatory relief. Former U.S. President Donald Trump has promised to reduce regulatory oversight and support domestic Bitcoin mining, a move that could benefit companies like Riot.
Riot is no stranger to activist investing itself. In 2023, the company attempted to acquire rival Bitcoin miner Bitfarms by building a significant stake. However, the takeover attempt was eventually abandoned after negotiations.
