Shares of Crypto Miner Riot Blockchain Jump 7% After Cantor Starts Coverage

The broker said that the firm is uniquely positioned to gain market share in the bitcoin mining sector.

By Will Canny

Jan 5, 2022 at 1:59 p.m. UTC

Updated Jan 5, 2022 at 10:55 p.m. UTC

A close-up of one of Riot's mining rigs. (Riot Blockchain)

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Will Canny

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Shares of crypto mining firm Riot Blockchain (RIOT) surged on Tuesday, closing over 7% higher, after broker Cantor Fitzgerald initiated coverage with an “overweight” rating and a price target of $45. However, shares tumbled 12% on Wednesday as the price of bitcoin fell several percent.

Cantor sees Riot as one of the best ways for investors to gain exposure to bitcoin without having to own the digital asset directly, as the mining company holds most of the mined coins on its balance sheet.
The broker said that Riot is in an “unique position” to continue to win market share in the coming years. The miner plans to more than double its mining capacity to 750 MW by the second quarter of 2022, and to triple its hashrate to 9 EH/s by year end, Cantor noted in its report.
The miner’s hashrate is the second highest in the industry, the report added.
Riot’s acquisition of Whinstone gives it a significant advantage over its peers because it reduces the miner’s reliance on third party hosting providers, Cantor said. The acquisition also makes it more vertically integrated and gives the firm increased control over its mining infrastructure and operating costs, the broker added.
The Nasdaq-listed mining company acquired Whinstone from Northern Data AG in April for a total value of $651 million in cash and shares.
On Wednesday, Riot announced that it had mined 425 bitcoins in December, up 334% from 98 bitcoins a year ago, and 3,812 bitcoins in all of 2021, up 269% from 1,033 in 2021. At the end of 2021, Riot owned 4,889 bitcoins, worth roughly $213 million at current prices.
That compared to 1,044 bitcoin mined in December and 5,769 mined in 2021 by Core Scientific, 363 bitcoins mined in December and 3,452 in 2021 by Bitfarms (BITF) and 484.5 bitcoins mined in December and 3,197 in 2021 by Marathon Digital (MARA).

UPDATE (Jan. 5, 22:55 UTC): Updated with Riot’s share performance on Wednesday, and Riot and its rivals’ December and full year 2021 bitcoin production numbers.

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Will Canny

Will Canny is CoinDesk's finance reporter.

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Will Canny

Will Canny is CoinDesk's finance reporter.