Riot Blockchain (RIOT) – Great Stock for Crypto Exposure!


Last week was a busy one at Riot Blockchain (RIOT) HQ.

First off, the company disclosed the purchase of 42,000 Bitmain S19j Antminers. Riot is paying $138.5 million for the new additions to its ever-expanding Bitcoin mining network, which works out at roughly $3,300 per unit. Once fully deployed, Riot’s fleet will boast 81,150 Antminers, putting it on course to achieve 7.7 EH/s by the end of next year.

That’s not all, however. Riot has also agreed to pay a total of roughly $665 million – $80 million in cash and 11.8 million shares – to acquire Texas-based Whinstone U.S. from Germany-based Northern Data AG.

Riot is getting its hands on a 100-acre facility which has long-term access to 750 MW of power. The facility is also home to three separate clients using 3 different buildings to mine Bitcoin. In total, these clients currently use 95,000 sq ft and 300 MW. Another 60,000 sq ft building is under construction and there is space for additional buildings. What’s more, each building’s power rating can also be expanded.

The recent activity, according to H.C. Wainwright’s Kevin Dede, marks “an eruption in Riot’s business development that places the company on a course to become a much larger, better diversified bitcoin miner by revenue mix at the close of next year.”

Although the “relevant financial operating data” has not yet been provided, Dede is “focused on the newly opened door of opportunity for control and expansion.” Dede thinks the deal’s long-term impact could be a game changer for Riot’s business.

“There is little doubt in our minds this is a quantum leap in Riot’s positioning in subjugating its dependence on third-party Coinmint to host (read, manage) its mining network while segregating subjection to Coinmint’s priorities and pricing,” said the 5-star analyst. “We understand it behooves Riot to get the deal done as quickly as possible as approximately 1,500 new Bitmain S19 series mining machines arrive for installation every month, and it makes clear sense to deploy those new machines in Texas under its own management versus Coinmint’s in Upper New York State.”

Based on all of the above, Dede rates RIOT shares a Buy, while his $64 price target implies an upside of 29%.

Bitcoin miners have yet to attract many reviews from Wall Street’s experts, and Dede remains the sole analyst currently covering RIOT.

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