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Stonegate Capital Partners Initiates Coverage on Riot Blockchain, Inc. (NASDAQ:RIOT)

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DALLAS, TX / ACCESSWIRE / September 9, 2021 / Riot Blockchain, Inc. (NASDAQ:RIOT): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/RIOT Initiation.pdf.


Riot Blockchain, Inc. ("Riot" or "the Company") focuses on cryptocurrency mining operations in North America. Riot is focused on building the infrastructure backbone of the Bitcoin mining network and supporting the Bitcoin blockchain using specialized computers or "miners" to mine Bitcoin in the United States. As of June 30, 2021, the Company operated a fleet of 16,000 miners. Riot is headquartered in Castle Rock, Colorado with mining operations in Rockdale, Texas and Massena, New York.


  • Riot is focused on building the infrastructure backbone of the Bitcoin mining network in the United States - Bitcoin miners fulfill a critical role in maintaining the security and integrity of Bitcoin's blockchain ledger. Riot participates in Bitcoin mining through its self-mining business and through its third-party hosting business, where it hosts other institutional Bitcoin miners. The Company describes itself as a big believer in Bitcoin and its ability to reinvent global finance. Riot's deployed Bitcoin mining fleet is primarily comprised of Bitmain Tech Lte. Ltd. ("Bitmain")'s latest-generation Antminer S19 Pro models.

  • Whinstone acquisition is transformational - In May 2021, Riot closed its acquisition of Whinstone US ("Whinstone") in Rockdale, Texas. Whinstone is the largest Bitcoin mining facility in North America, with power costs among the lowest in the industry. Riot believes the acquisition gives it more control over its own destiny, providing the Company with a clear and significantly de-risked path to future growth. Whinstone's industry-leading power costs, coupled with increased scale, should allow Riot to have better control of profitability through the addition of more miners and third-party hosting clients. Upon closing the acquisition, Riot announced its intention to expand Whinstone's capacity from 300MW to 700MW. Construction is currently underway, with the incremental expansion expected to be completed by Q2 2022.

  • Industry-leading hash rate - As of September 2021, Riot's operational hash rate capacity is 2.22 exahash per second ("EH/s"). The Company is targeting 4.6 EH/s by Q4 2021 and 7.7 EH/s by Q4 2022. Driving these expectations are growth from 22,050 operational miners as of mid-Q3 2021 to a total fleet of over 81,000 Antminers to be fully deployed in Q4 2022.

  • Vehicle for investors seeking exposure to Bitcoin - Riot mines Bitcoin and holds Bitcoin on its balance sheet. In addition, as its hosting business grows in the future, Riot's hosting revenues could also act as a driver of profitability. As a result, management believes the Company serves as an excellent vehicle for investors that are seeking exposure to Bitcoin and its potential growth.

  • Valuation - We are using an EV/EBITDA range of 15.0x to 25.0x with a mid-point of 20.0x. We note that we have adjusted Riot's cash balance and shares outstanding to reflect the recent close of Whinstone in May 2021. Applying this multiple range to our F22E EBITDA, we arrive at a valuation range of $37.75 to $62.25, with a mid-point of $50.00. See page 6 for further details.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.


Stonegate Capital Partners
(214) 987-4121

SOURCE: Stonegate Capital Partners

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