Riot Stock Plummets On $500M Bitcoin Funding Plan: Retail Eyes Rebound

Shares of Riot Platforms dropped as much as 10% after Monday’s opening bell following the company’s announcement of a private offering for $500 million in convertible senior notes..

Riot plans to use the funds primarily to purchase more Bitcoin and for general corporate purposes.

The company is also offering initial buyers the option to acquire an additional $75 million in notes. These unsecured senior notes will mature on January 15, 2030.

Riot Platforms Sentiment and Message Volume on Dec 9 as of 9:30 a.m. ET | Source: Stocktwits

Riot was among the top 10 trending tickers on Stocktwits as retail sentiment shifted to ‘bullish’ (65/100), up from ‘neutral’ the previous day. 

Retail sentiment around the stock elevated to ‘bullish’ (65/100) from ‘neutral’ a day ago, with users weighing the pros and cons of Riot planning on using the funds to buy more Bitcoin.

The Bition miner is the third largest corporate holder of Bitcoin, behind Microstrategy and Marathon Holdings. 

Riot currently has 11,425 Bitcoin on its balance sheets, valued at approximately $1.13 billion – around a quarter of its market capitalization of $4.3 billion. 

In November, the company mined 495 Bitcoin, a decline both year-over-year and sequentially. CEO Jason Les attributed the drop to the increase in network difficulty following April’s Bitcoin halving event.

To boost its capacity, Riot recently invested $290.5 million to purchase over 66,000 MicroBT miners, adding 18 exahashes per second (EH/s) to its hash rate.

While other Bitcoin-linked stocks, most notably MicroStrategy, have exponential gains after Bitcoin’s bull run to over $103,000, Riot is down over 15% so far this year. 

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