Insider sources claim that activist investor Starboard Value has taken a significant stake in Bitcoin (BTC) mining company Riot Platforms (RIOT). According to the Wall Street Journal, the investor is pushing the Bitcoin miner to convert some of its facilities into data centers. Starboard Value wants these changes to allow Riot Platforms to strike deals with hyperscalers.
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Hyperscalers are companies focused on expanding data center usage to facilitate the ongoing artificial intelligence (AI) boom. Two examples of large companies in this space are Alphabet’s (GOOGL) Google and Amazon’s (AMZN) Web Services division.
Riot Platforms has responded to Starboard Value’s request, saying it looks “forward to constructive dialogue with Starboard” to create “value for all shareholders.” RIOT shareholders will note that it’s still unknown how much of a stake the activist investor holds.
What This Means for RIOT Stock
Starboard Value’s stake in Riot Platforms means that changes might be coming to the company. Depending on how much weight it has to throw around, the activist investor could push the business in a different direction. That might not be a bad thing for Riot Platforms, as entering the data center space could bring significant profits.
News of Starboard Value taking a stake in Riot Platforms brings heavy trading to the company’s shares. This has 70.57 million units traded today, compared to a three-month daily average of 25.98 million shares.
With this heavy trading comes a big rally for RIOT stock, which is up 9.52% as of this writing. That’s a boon to investors, considering the stock is down 15.64% year-to-date and 14.37% over the last 12 months.
Is RIOT Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Riot Platforms is Strong Buy based on 12 Buy ratings over the past three months. With that comes an average price target of $17.73, a high of $24, and a low of $11. This represents a potential 37.23% upside for RIOT shares.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
