Kerrisdale Capital Hits Riot Platforms With Short Sell Report: Details
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 05 2024
0mins
Should l Buy RIOT?
Source: Benzinga
- Riot Platforms, Inc Report: Kerrisdale Capital’s Founder expressed a bearish view on Riot Platforms due to its focus on energy arbitrage and stock issuance over generating shareholder value through crypto mining.
- Concerns Raised: 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.
- Management Issues: Adrangi highlighted that Riot has never shown positive cash flow or decent returns, with excessive management compensation and frequent dilution.
- Texas Regulatory Environment: Despite Texas' appeal to Bitcoin miners for cheap energy and lenient regulations, concerns over environmental impact are leading to increased oversight and legislation that could affect profitability.
- Investor Recommendations: The analyst suggested that investors have better options for Bitcoin exposure through low-fee ETFs and ETPs, as Riot Platforms lost 16% in the last year.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy RIOT?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
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: 16.430
Low
20.00
Averages
27.00
High
42.00
Current: 16.430
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 FY Revenue Grows 71.9% but Misses Expectations
- Annual Revenue Performance: Riot Platforms reported FY revenue of $647.4 million, reflecting a 71.9% year-over-year increase, although this figure fell short of market expectations by $10.94 million, indicating challenges in a rapidly growing market.
- Net Loss Situation: The company posted a net loss of $663,181, highlighting that despite revenue growth, cost control and profitability improvements are necessary, which may affect investor confidence in the company's future financial health.
- Market Reaction: Despite the earnings report not fully meeting expectations, Riot Platforms' stock climbed following a letter from Starboard Value, indicating market optimism regarding the company's future strategic adjustments, particularly in the diversification into data center hosting.
- Strategic Transformation Potential: Riot Platforms is diversifying into data center hosting, and while currently facing challenges, this strategic shift is viewed as having significant upside potential, which could provide new growth momentum for the company in the future.
See More
Global Stock Markets Retreat as Oil Prices Surge
- Market Decline: The S&P 500 index fell by 0.94%, reaching a 3.25-month low, reflecting investor concerns over escalating tensions in Iran, which may impact future investment decisions and market stability.
- Surge in Oil Prices: WTI crude oil prices rose over 4% to an 8.5-month high due to threats from Iran to close the Strait of Hormuz, intensifying fears of energy supply disruptions and potential inflationary pressures in the economy.
- Natural Gas Price Spike: European natural gas prices surged more than 22% to a three-year high after Qatar's Ras Laffan plant was targeted by an Iranian drone attack, posing significant risks to global liquefied natural gas supply and market stability.
- Economic Data Expectations: This week, the ADP employment change is expected to increase by 50,000, while the ISM services index is projected to slip slightly, with markets closely monitoring these indicators to assess economic health and potential implications for Federal Reserve monetary policy decisions.
See More
Global Stock Markets Plunge as Oil Prices Surge Amid Iran Conflict
- Stock Market Decline: The S&P 500 index fell by 2.18%, reaching a 3.25-month low, indicating market concerns over the Iran conflict that may lead to decreased investor confidence and increased volatility.
- Surge in Oil Prices: WTI crude oil prices rose over 8% to an 8.5-month high due to Iran's threats to close the Strait of Hormuz, potentially causing long-term disruptions in global energy markets and raising inflation expectations.
- Rising Bond Yields: The 10-year German bund yield climbed to a 2.5-week high of 2.814%, reflecting market worries about future inflation, which may prompt investors to shift towards bonds for safety.
- Economic Data Focus: This week, the market will focus on U.S. employment data and economic indicators, with the ADP employment change expected to rise by 40,000 and the ISM services index anticipated to slip slightly, indicating potential economic slowdown.
See More
Global Stock Markets Plunge as Oil Prices Surge Amid Iran Conflict
- Market Decline: The S&P 500 index fell by 1.82%, the Dow Jones Industrial Average dropped by 2.07%, and the Nasdaq 100 decreased by 1.78%, marking a 2.5-month low for the S&P 500, indicating growing concerns about the global economic outlook.
- Surging Oil Prices: WTI crude oil prices surged over 7% to an 8.5-month high due to escalating conflict in Iran, raising fears of energy supply disruptions and increasing inflation expectations, which negatively impact stock market performance.
- Rising Bond Yields: The 10-year German bund yield reached a 2.5-week high of 2.814%, while the 10-year UK gilt yield climbed to a 3-week high of 4.536%, reflecting market concerns over future inflation, further pressuring stock prices.
- Earnings Outlook: Despite market volatility, 73% of S&P 500 companies exceeded earnings expectations, with Q4 earnings growth projected at 8.4%, indicating strong corporate fundamentals, yet market sentiment remains subdued.
See More
Riot Platforms Price Target Downgrade Analysis
- Price Target Cuts: Cantor Fitzgerald reduced Riot Platforms' price target from $31 to $29 while maintaining an 'Overweight' rating, primarily due to weaker Bitcoin prices and deteriorating mining economics, indicating market concerns about the company's future profitability.
- Rising Expenses Impact: Needham lowered its target from $30 to $24 but kept a 'Buy' rating, citing faster-than-expected growth in expenses, including SG&A, in Q4, and also reduced 2026 mining estimates, reflecting the cost pressures the company faces.
- Mining Revenue Growth: Despite challenges, Riot Platforms reported a 72% year-over-year revenue increase for 2025, reaching $647.4 million, driven mainly by stronger Bitcoin mining revenue, showcasing the company's robust performance in the mining sector.
- Bitcoin Production Status: Riot mined 1,324 Bitcoins in Q4, generating $131.7 million in mining revenue, although this was an 18.1% decline from the previous quarter, yet it still demonstrates the company's ongoing capability in Bitcoin production.
See More
Riot Platforms Reports Q4 Loss Amid Revenue Growth
- Quarterly Financial Performance: Riot Platforms reported a Q4 loss of $2.03 per share on revenue of $152.83 million, indicating ongoing profitability challenges despite revenue growth, which may impact investor confidence.
- Annual Revenue Growth: Total revenue for 2025 reached $647.4 million, a 71% increase from $376.7 million in 2024, primarily driven by a $255.3 million rise in Bitcoin mining revenue, showcasing the company's strong performance in the cryptocurrency market.
- Strategic Transformation: CEO Jason Les highlighted that 2025 marked a pivotal year for strategic evolution, as unlocking nearly two gigawatts of power capacity for high-demand data center infrastructure significantly enhances shareholder value, indicating future growth potential.
- Analyst Rating Adjustments: Following the earnings announcement, several analysts adjusted their price targets for Riot Platforms, with HC Wainwright lowering from $26 to $23, Needham from $30 to $24, and Piper Sandler from $26 to $21, reflecting a cautious market outlook on the company's future performance.
See More
Riot Platforms FY Revenue Grows 71.9% but Misses Expectations
- Annual Revenue Performance: Riot Platforms reported FY revenue of $647.4 million, reflecting a 71.9% year-over-year increase, although this figure fell short of market expectations by $10.94 million, indicating challenges in a rapidly growing market.
- Net Loss Situation: The company posted a net loss of $663,181, highlighting that despite revenue growth, cost control and profitability improvements are necessary, which may affect investor confidence in the company's future financial health.
- Market Reaction: Despite the earnings report not fully meeting expectations, Riot Platforms' stock climbed following a letter from Starboard Value, indicating market optimism regarding the company's future strategic adjustments, particularly in the diversification into data center hosting.
- Strategic Transformation Potential: Riot Platforms is diversifying into data center hosting, and while currently facing challenges, this strategic shift is viewed as having significant upside potential, which could provide new growth momentum for the company in the future.
See More
Global Stock Markets Retreat as Oil Prices Surge
- Market Decline: The S&P 500 index fell by 0.94%, reaching a 3.25-month low, reflecting investor concerns over escalating tensions in Iran, which may impact future investment decisions and market stability.
- Surge in Oil Prices: WTI crude oil prices rose over 4% to an 8.5-month high due to threats from Iran to close the Strait of Hormuz, intensifying fears of energy supply disruptions and potential inflationary pressures in the economy.
- Natural Gas Price Spike: European natural gas prices surged more than 22% to a three-year high after Qatar's Ras Laffan plant was targeted by an Iranian drone attack, posing significant risks to global liquefied natural gas supply and market stability.
- Economic Data Expectations: This week, the ADP employment change is expected to increase by 50,000, while the ISM services index is projected to slip slightly, with markets closely monitoring these indicators to assess economic health and potential implications for Federal Reserve monetary policy decisions.
See More
Global Stock Markets Plunge as Oil Prices Surge Amid Iran Conflict
- Stock Market Decline: The S&P 500 index fell by 2.18%, reaching a 3.25-month low, indicating market concerns over the Iran conflict that may lead to decreased investor confidence and increased volatility.
- Surge in Oil Prices: WTI crude oil prices rose over 8% to an 8.5-month high due to Iran's threats to close the Strait of Hormuz, potentially causing long-term disruptions in global energy markets and raising inflation expectations.
- Rising Bond Yields: The 10-year German bund yield climbed to a 2.5-week high of 2.814%, reflecting market worries about future inflation, which may prompt investors to shift towards bonds for safety.
- Economic Data Focus: This week, the market will focus on U.S. employment data and economic indicators, with the ADP employment change expected to rise by 40,000 and the ISM services index anticipated to slip slightly, indicating potential economic slowdown.
See More
Global Stock Markets Plunge as Oil Prices Surge Amid Iran Conflict
- Market Decline: The S&P 500 index fell by 1.82%, the Dow Jones Industrial Average dropped by 2.07%, and the Nasdaq 100 decreased by 1.78%, marking a 2.5-month low for the S&P 500, indicating growing concerns about the global economic outlook.
- Surging Oil Prices: WTI crude oil prices surged over 7% to an 8.5-month high due to escalating conflict in Iran, raising fears of energy supply disruptions and increasing inflation expectations, which negatively impact stock market performance.
- Rising Bond Yields: The 10-year German bund yield reached a 2.5-week high of 2.814%, while the 10-year UK gilt yield climbed to a 3-week high of 4.536%, reflecting market concerns over future inflation, further pressuring stock prices.
- Earnings Outlook: Despite market volatility, 73% of S&P 500 companies exceeded earnings expectations, with Q4 earnings growth projected at 8.4%, indicating strong corporate fundamentals, yet market sentiment remains subdued.
See More
Riot Platforms Price Target Downgrade Analysis
- Price Target Cuts: Cantor Fitzgerald reduced Riot Platforms' price target from $31 to $29 while maintaining an 'Overweight' rating, primarily due to weaker Bitcoin prices and deteriorating mining economics, indicating market concerns about the company's future profitability.
- Rising Expenses Impact: Needham lowered its target from $30 to $24 but kept a 'Buy' rating, citing faster-than-expected growth in expenses, including SG&A, in Q4, and also reduced 2026 mining estimates, reflecting the cost pressures the company faces.
- Mining Revenue Growth: Despite challenges, Riot Platforms reported a 72% year-over-year revenue increase for 2025, reaching $647.4 million, driven mainly by stronger Bitcoin mining revenue, showcasing the company's robust performance in the mining sector.
- Bitcoin Production Status: Riot mined 1,324 Bitcoins in Q4, generating $131.7 million in mining revenue, although this was an 18.1% decline from the previous quarter, yet it still demonstrates the company's ongoing capability in Bitcoin production.
See More
Riot Platforms Reports Q4 Loss Amid Revenue Growth
- Quarterly Financial Performance: Riot Platforms reported a Q4 loss of $2.03 per share on revenue of $152.83 million, indicating ongoing profitability challenges despite revenue growth, which may impact investor confidence.
- Annual Revenue Growth: Total revenue for 2025 reached $647.4 million, a 71% increase from $376.7 million in 2024, primarily driven by a $255.3 million rise in Bitcoin mining revenue, showcasing the company's strong performance in the cryptocurrency market.
- Strategic Transformation: CEO Jason Les highlighted that 2025 marked a pivotal year for strategic evolution, as unlocking nearly two gigawatts of power capacity for high-demand data center infrastructure significantly enhances shareholder value, indicating future growth potential.
- Analyst Rating Adjustments: Following the earnings announcement, several analysts adjusted their price targets for Riot Platforms, with HC Wainwright lowering from $26 to $23, Needham from $30 to $24, and Piper Sandler from $26 to $21, reflecting a cautious market outlook on the company's future performance.
See More
