2024

Block

Steel

<p class="is-style-lead">Analysts from H.C. Wainwright claim that Riot’s acquisition of Block Mining is a great move for the company and its hash rate.</p>
<p>Riot Platforms, Inc. has significantly enhanced its growth and operational capacity by <a href="https://crypto.news/bitcoin-miner-riot-platforms-acquires-rival-block-mining-for-92-5m/" data-type="link" data-id="https://crypto.news/bitcoin-miner-riot-platforms-acquires-rival-block-mining-for-92-5m/" rel="noopener noreferrer nofollow">acquiring</a> Kentucky-based Block Mining, Inc. for $92.5 million.</p>
<p>The acquisition consists of $18.5 million in cash and $74 million in Riot common stock, with an additional earn-out consideration of up to $32.5 million contingent on achieving specific milestones.&nbsp;</p>
<p>“With a combined 60 MW of existing developed capacity, and a pipeline to rapidly scale to over 300 MW, this acquisition expands our operations and further enhances our path towards our growth target of 100 EH/s,” Riot Platforms CEO Jason Les said in a release.</p>
<p>Despite the high price tag, analysts at H.C. Wainwright believe the acquisition cost is justified due to BMI’s substantial capacity and expansion potential.</p>
<p>You might also like: <a href="https://crypto.news/riot-requisitions-special-meeting-of-bitfarms-withdraws-950m-acquisition-proposal/" rel="noopener noreferrer nofollow"> Riot requisitions special meeting of Bitfarms, withdraws $950m acquisition proposal </a></p>
<h2 class="wp-block-heading" id="riot-is-expanding-its-capacity-and-operations">Riot is expanding its capacity and operations</h2>
<p>Block Mining operates 60 MW across two data centers in Kentucky, adding 1 EH/s to Riot’s portfolio. The Commerce Drive data center in Paducah, KY, operates 35 MW, while the Blue Steel site in Calvert City, KY, utilizes 7 MW with an 18 MW vacancy.</p>
<p>Riot plans to expand these capacities significantly, targeting 110 MW by the end of 2024 and 305 MW by the end of 2025. This expansion will potentially increase Riot’s <a href="https://crypto.news/bitcoin-hash-rate-at-all-time-highs-gala-and-inqubeta-in-focus/" target="_blank" data-type="link" data-id="https://crypto.news/bitcoin-hash-rate-at-all-time-highs-gala-and-inqubeta-in-focus/" rel="noopener noreferrer nofollow">hash rate</a> to 36.3 EH/s by the end of 2024 and 56.6 EH/s by the end of 2025.</p>
<p>You might also like: <a href="https://crypto.news/texas-blockchain-council-and-riot-platforms-sue-us-federal-agencies-over-crypto-energy-scrutiny/" rel="noopener noreferrer nofollow"> Texas Blockchain Council and Riot Platforms sue US federal agencies over crypto energy scrutiny </a></p>
<h2 class="wp-block-heading" id="riot-s-long-term-growth-and-diversification">Riot’s long-term growth and diversification</h2>
<p>This acquisition aligns with Riot’s long-term goal of reaching 100 EH/s. Additionally, it diversifies Riot’s geographic footprint beyond <a href="https://crypto.news/bitcoin-mining-causing-health-issues-in-texas-residents/" target="_blank" data-type="link" data-id="https://crypto.news/bitcoin-mining-causing-health-issues-in-texas-residents/" rel="noopener noreferrer nofollow">Texas</a>, where all its mining operations were previously located.</p>
<p>Analysts see this as a prudent use of capital, enhancing Riot’s operational efficiency and reducing geographic risk.</p>
<h2 class="wp-block-heading" id="riot-s-financial-risks">Riot’s financial risks</h2>
<p>Post-acquisition, Riot expects to spend $345 million in capital expenditures to fully develop BMI’s sites. Despite the substantial investment, Riot’s strong liquidity position, with $639 million in cash and significant Bitcoin holdings, supports this expansion.&nbsp;</p>
<p>Analysts have raised Riot’s 2024 revenue estimate to $344.2 million and adjusted EBITDA estimate to $321.7 million, reflecting confidence in the acquisition’s potential to drive growth and profitability.</p>
<p>Read more: <a href="https://crypto.news/bitcoin-miner-riot-platforms-acquires-rival-block-mining-for-92-5m/" rel="noopener noreferrer nofollow"> Bitcoin miner Riot Platforms acquires rival Block Mining for $92.5m </a></p>

Analyst: Riot acquisition price of Block Mining is ‘justified,’ improves its hash rate

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