Riot Platforms (RIOT 1.96%) stock closed Wednesday almost 6% higher in value, and, somewhat atypically, this wasn't due to the price movement of its favored asset, Bitcoin. Rather, investors were encouraged by the latest action of a high-profile shareholder in the crypto mining company.
The company is a laggard, says activist
Before market open, that shareholder -- activist investor Starboard Value -- sent a missive to Riot's CEO, Jason Les, and its chairman of the board of directors, Benjamin Yi. With it, Starboard clearly intended to inspire the company's leaders to pursue its transformation strategy more assiduously.
Image source: Getty Images.
Like other crypto miners, Riot has been attempting to leverage its existing assets to bolster its artificial intelligence (AI) and high-performance computing (HPC) hosting services.
While Starboard complimented Lee and Yi for their efforts so far, it hastened to point out that Riot's share price has lagged that of other miners shifting into the AI/HPC spaces.
The activist wrote that "Although this underperformance is frustrating, we believe that Riot is better positioned to do
higher-quality deals than its peers. Time is of the essence, and a renewed sense of urgency is required to get more material deals completed."
Riot has not yet publicly responded to the letter.
NASDAQ: RIOT
Key Data Points
A necessary push?
Activist investors are not known for their patience, so Starboard's move isn't all that surprising. The firm is good at applying pressure to management teams, so I'd imagine Riot's leaders will attempt to demonstrate how hard they're pushing into those enticing segments. There is much potential in them, and if its diversification is successful, I believe Riot can easily capitalize on the opportunity. I'd be bullish on its future.
