On Wednesday, Roth/MKM maintained its Buy rating on Riot Platforms (NASDAQ:RIOT) stock, a prominent player in the cryptocurrency mining sector, with a $20.00 price target. The firm's endorsement follows Riot's recent acquisition of Block Mining, a private mining company, for an approximate total of $92.5 million, which could reach $125 million when considering additional contingent payments.
The transaction grants Riot Platforms immediate access to 60 megawatts of power, equating to 1 exahash per second (EH/s) of mining capacity, with the prospect of expanding to roughly 305 megawatts, or an additional 15.8 EH/s, by the end of 2025.
The strategic move is in line with Riot's ambitions to geographically expand, diversify its power resources, and secure scalable locations featuring low-cost power and construction expenses.
The total estimated value of the deal, including the full consideration and approximately $345 million in construction costs, is approximately $30 million per EH/s. Roth/MKM anticipates updating its business model for Riot Platforms after the company's second-quarter results are released on July 31.
This acquisition is significant for Riot Platforms as it seeks to bolster its position in the rapidly evolving cryptocurrency mining industry. The integration of Block Mining's capacity is expected to enhance Riot's operational capabilities and support its long-term growth strategy.
The financial community will be closely monitoring the upcoming quarterly report for further insights into the impact of this acquisition on Riot's financial performance and future prospects.
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