Riot Platforms: Crypto To AI Pivot Still In Progress
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Joseph Parrish3.21K FollowersFollow5ShareSavePlay(7min)CommentsSummaryRiot Platforms (RIOT) is transitioning from pure crypto mining to a data center-focused business model. This strategic pivot aims to diversify RIOT's revenue streams and reduce dependence on the cash burning of BTC mining. Their Corsicana facility could do $1B in business in a few years, based on comparable data center contracts. The ever-present need for financing, which can lead to shareholder dilution, counter-balances the growth of this opportunity. olando_o/iStock via Getty Images Riot Platforms (RIOT) is a crypto miner pivoting into AI data centers. I think the story is improving here, but it's not enough quite yet, so I maintain my Hold rating. Summary of Previous ThesesThis article was written byJoseph Parrish3.21K FollowersFollowI analyze securities based on value investing, an owner's mindset, and a long-term horizon. I don't write sell articles, as those are considered short theses, and I never recommend shorting.I was initially interested in a career in politics, but after reaching a dead-end in 2019 and seeing the financial drain this posed, I choose a path that would make my money work for me and protect me from more setbacks. This brought me to study value investing, in order to grow wealth with risk management in mind.From 2020 to 2022, I worked in a sales role at a law firm. As the top-grossing salesman, I eventually managed a team and contributed to our sales strategy. I spent much of my free time reading books and annual reports, steadily building my vault of knowledge about public companies. This period has since been useful in helping me assess a company's prospects by its sales strategy. I particularly get excited when the product seems to sell itself.From 2022 to 2023, I worked as an investment advisory rep with Fidelity, primarily with 401K planning. My personal study before that allowed me to pass my Series exams two weeks ahead of schedule, and I once again found myself excelling at the job. I learned a few useful things from this more formal setting, but my main frustration was that I was still a value investor, and Fidelity's 401K planning was based on modern portfolio theory. Lacking a way to change positions internally, I chose to walk away after a year.I gave writing for Seeking Alpha a try in November of 2023, and I've been here since. As I spent those years saving aggressively and building up my base of capital, I also actively invest now. My articles are how I share the opportunities that I seek for myself, and my readers are effectively walking this road alongside me.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsHow does RIOT's pivot to data centers affect its investment thesis?RIOT's shift diversifies revenue and aligns with secular growth in data infrastructure, potentially reducing crypto-related volatility and enhancing long-term value.What risks emerge from RIOT's transition away from pure crypto mining?The transition introduces execution risks, including capital allocation, operational integration, and competition in the data center sector, which could impact margins and growth.How might RIOT's new strategy influence its valuation multiples?If successful, RIOT could command higher multiples reflecting data center peers, but execution uncertainty may keep valuation in transition until results materialize.Recommended For You