Riot Platforms Pursues Acquisition of Rhodium Encore Assets

AUSTIN, Texas — Riot Platforms, Inc. announced its intention to acquire specific assets from Rhodium Encore at its Rockdale Facility, following a non-binding term sheet issued on March 6, 2023. The company aims to solidify its position in the cryptocurrency mining industry while expanding into high-performance computing (HPC).

In a recent research note, Roth MKM maintained a Buy rating for Riot Platforms and set a price target of $20 per share. The firm’s analyst emphasized the company’s strong focus on mining as its core revenue driver but highlighted potential growth in HPC due to escalating demand for training and inference tasks.

Riot views its Corsicana facility as the most strategic site for constructing a 600-megawatt HPC operation, which is expected to launch in multiple phases starting in 2026, according to the analyst’s assessment.

The proposed acquisition will see Riot’s wholly-owned subsidiary, Whinstone US, Inc., provide a total of $185 million to Rhodium. This includes $129.9 million in cash, a $6.1 million return of Rhodium’s power security deposit, and $49 million in Riot shares that will be priced based on stock performance leading up to the transaction’s closing.

Upon finalizing the deal, Rhodium will transfer all tangible property located at the Rockdale Facility, which includes ASIC miners, and will vacate the site within three business days. This will allow Riot to allocate the entire 125 megawatts of power capacity at the facility for its own operations.

As part of the transaction, both Whinstone and Rhodium will also dismiss any ongoing litigation. The future of this acquisition hinges on receiving approval from the Bankruptcy Court under Bankruptcy Rule 9019 and Section 363 of the Bankruptcy Code, as well as executing definitive agreements.

Riot Platforms committed to providing further updates as developments unfold.