Key Takeaways
- Leopold Aschenbrenner’s Situational Awareness added 49% to its Riot Platforms stake in the second quarter, while Starboard Value cut its stake by 35%.
- Even after the cut, Riot made up a bigger share of Starboard’s portfolio (6.1%) than of Aschenbrenner’s (about 2.2% to 2.6%).
- Riot still trades above its five-year average multiple on forward sales, with losses and negative free cash flow expected through 2028.
- On TIKR’s numbers, Starboard’s trim is the better call for now, and replacing Riot’s $573 million bridge loan by Dec. 31 is the next big test.
Riot Platforms (RIOT) has lost more than half its value since June 30, and two well-known funds were on opposite sides of it heading into that drop.
Leopold Aschenbrenner’s Situational Awareness added to its stake in Q2, while Jeff Smith’s Starboard Value cut its stake by 35%.
That’s according to each fund’s 13F for the quarter ended June 30, filed Aug. 14. Those are still their latest filings: the 13Fs for the quarter ended Sept. 30 are due by Nov. 16.
Aschenbrenner leaned in
Situational Awareness held 17.10 million Riot shares on June 30, 49% more than three months earlier. They were worth $468 million at quarter-end prices, or 2.3% of the fund’s $20.17 billion of US stocks, making Riot its 10th-largest position.
That’s a modest bet for a fund that size, but a growing one.
Starboard trimmed, but Riot is still a big holding
Starboard went the other way. It held 10.11 million shares on June 30, 35% fewer than three months earlier, worth $277 million. It also held put options with a notional value of $2 million, small next to its shares.
Even after the cut, Riot was 6.1% of Starboard’s $4.52 billion of US stocks, its eighth-largest position. So Starboard still had a much bigger share of its portfolio in Riot than Aschenbrenner did.
Riot stock is down 53% since June 30. That’s only the change in the share price, since neither filing shows what the funds paid or whether they still own the shares.
TIKR tracks 22 analysts on Riot Platforms. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Riot Platforms, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Riot Platforms’ Analyst Ratings
Revenue is growing, and so are the bills
The bull case for Riot rests on its Texas power. Management puts Riot’s contracted data center revenue at about $9.8 billion, from leases to AMD and to an AI lab that Bloomberg reported is Anthropic (neither company has confirmed it). That lab accounts for $9.1 billion of the total.
Analysts expect revenue to climb from $647 million in 2025 to $1.24 billion in 2028, with most of the jump in the final year:
(Only 11 analysts estimate 2028, against 21 for this year.)
Analysts’ 2028 revenue estimate was 22% higher on Oct. 23 than on June 30. Analysts grew more confident in the leases even as the stock fell.
The leases cost a lot to build, though. Analysts expect losses every year through 2028 and also expect negative free cash flow of $1.5 billion in 2027 and $1.7 billion in 2028, with interest expense of $390 million in 2028 against EBITDA of $409 million. Lenders would take most of the first full year’s profit.
Before any of that, Riot has to replace a $573 million bridge loan from Morgan Stanley that comes due Dec. 31.
Is Riot cheap after a 53% drop?
Not against its own history. Riot has no forward earnings to price, so it’s valued on forward sales, at 6.8x. That’s down from 16x in late June, but still above its five-year average of 6.2x:
Analysts still see plenty of upside. The 22 analysts who cover Riot have an average target of $29.02, 127% above the last close. That average climbed from $25.44 a year ago to a peak of $32.52 on Sept. 29, and has slipped since:
Cantor Fitzgerald cut its target to $24 from $30 on Oct. 16, citing rising financing costs. ATB Cormark Capital Markets cut its target to $30 from $36 on Oct. 22. The lowest target among analysts, $13, is barely above the stock.
Starboard has the better case for now
If project lenders balk or charge too much, Riot’s fallback is selling stock: it has an unused $500 million at-the-market share program.
On TIKR’s numbers, Starboard’s trim looks like the smarter move. Riot still trades above its average multiple, and most of the revenue that justifies it arrives in 2028.
Until then it has losses and heavy spending, and analysts were cutting targets as the stock fell. I’d want the financing done before following Aschenbrenner in.
That could change quickly. Riot reports Q3 results in early November. A signed lease for its Corsicana campus, where it only has a letter of intent, would strengthen Aschenbrenner’s side.
And the 13Fs due by Nov. 16 will show whether either fund moved again.
So what is Riot Platforms stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Riot Platforms could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
