Bitcoin Miner Riot Platforms Faces Investor Pressure as D.E. Shaw Joins Starboard

Investment firm D.E. Shaw has reportedly acquired a stake in Bitcoin miner Riot Platforms. 

Although the exact size of D.E. Shaw’s position has not been disclosed, the firm’s involvement signals potential changes on the horizon for the company. 

Riot Caught Between Activist Investors D.E. Shaw and Starboard

D.E. Shaw, which manages $70 billion in assets, is known for its strategic investments. According to a Reuters report, the firm could push Riot to adopt new approaches or restructure certain aspects of its business.

D.E. Shaw is not an activist investor but leverages activism as a tool when the situation warrants it.

This move comes shortly after activist investor Starboard Value took a significant stake in Riot in December. Starboard, known for seeking to influence the companies it invests in, is likely to pursue changes aimed at improving profitability or corporate strategy. 

The Wall Street Journal reported that Starboard wants Riot to convert some of its bitcoin-mining facilities into space for big data center users.

The combination of D.E. Shaw and Starboard’s involvement suggests that Riot may face increased pressure to enhance shareholder value, streamline operations, or consider new business opportunities.

Nevertheless, many in the crypto community view the involvement of activist investors as positive news. 

“Hedge fund giant D.E. Shaw has acquired a stake in Riot Platforms, signaling a bullish outlook on crypto mining. Could this be a game-changer for the industry?” posted one X user.

Riot Platforms, formerly known as Riot Blockchain, has been expanding its Bitcoin mining operations in response to the growing demand for crypto. The company is one of the largest Bitcoin miners in North America.

“D.E. Shaw’s recent acquisition of a stake in Riot Platforms marks a significant move in the cryptocurrency mining sector. This strategic investment highlights the growing interest and potential in the crypto market as it evolves,” said another crypto enthusiast.

As of the end of 2024, Riot Platforms said it owned 17,722 BTC, a 141% increase from December 2023. Riot also mined 516 BTC in December, exceeding November’s output.

Separately, the latest development comes as Riot made an unsolicited offer of $950 million in May 2024 to acquire Canadian Bitcoin miner Bitfarms. On June 20, Bitfarms implemented a shareholder rights plan, commonly known as a “poison pill,” to prevent a hostile takeover.

Riot Platforms and Bitfarms then finalized a settlement, ending the acquisition bid.