Riot Platforms’ Acquisition Of Block Mining Makes Sense, JPMorgan Says

• Riot’s acquisition of rival bitcoin miner Block Mining makes sense, the report said.
• JPMorgan noted that Riot will have the second-largest capacity of the U.S.-listed bitcoin miners.
• The bank has an overweight rating on Riot stock with a $12 price target.

Still, the announcement is surprising, given the expansion potential at Riot’s Corsicana site in Texas, the report said.

The Block Mining acquisition is not the company’s only attempt at M&A in recent months. Riot recently dropped a proposal to buy peer Bitfarms (BITF) and is looking to overhaul that target’s board before engaging in further takeover attempts.

JPMorgan notes that the Block Mining deal will add 1 exahash per second (EH/s) to Riot’s hashrate, a measure of its computational power, and may contribute up to 16 EH/s by the end of 2025. The hashrate is a proxy for competition in the industry and mining difficulty.

The bank has an overweight rating on Riot shares with a $12 price target. Riot was trading 0.5% higher at $11.65 in early trading on Wednesday.

Broker Bernstein said Riot was best suited to consolidate the bitcoin mining sector, in a report in May.