Riot Platforms, Inc. RIOT
Riot Platforms is a serial-diluting bitcoin miner with $140k+ all-in cost per coin, rising Texas regulatory risk, and a broken model increasingly obviated by low-fee BTC ETFs.
Thesis
Kerrisdale is short Riot Platforms, a $3bn bitcoin miner that has issued $2.3bn in stock since 2020 — 18% dilution YTD 2024 alone — yet has never generated positive cash flow. Post-halving unit economics are untenable: Riot's all-in cost to mine a bitcoin (including SBC, depreciation and cash SG&A) exceeds $140k versus ~$70k spot. Texas regulatory headwinds are intensifying: Navarro County rejected tax abatements for the Corsicana facility in March 2024, and SB 1751 — which would cap demand-response participation and revoke abatements — is expected to revive in 2025. Bitcoin production per share and BTC held per share have steadily declined, and investors can now get bitcoin exposure through low-fee ETFs instead of a dilution machine. Meanwhile cheap-power operators in Russia, Ethiopia, Paraguay and elsewhere are winning a global race U.S. public miners cannot.
SCQA
Riot Platforms is a $3bn Texas-based bitcoin miner operating Rockdale (North America's largest single BTC mining site) and building out Corsicana, funding relentless growth through ATM stock issuance rather than operating cash flow.
Riot's all-in cost per bitcoin mined exceeds $140k against ~$70k spot, production-per-share is falling, SB 1751 threatens Texas tax abatements and grid-arbitrage income, and cheap-power foreign competitors are flooding global hashrate.
Don't own Riot — with low-fee bitcoin ETFs now widely available, investors seeking bitcoin exposure should simply own BTC directly rather than a serial-diluting miner with broken post-halving unit economics.
Kerrisdale is short and expects further declines: Riot is already down 37% YTD while bitcoin is up 74%, and the historical RIOT-BTC correlation has collapsed since spot ETFs launched in January 2024.
The three reasons
- 1
Serial dilution: $2.3bn stock issued since 2020, 18% YTD 2024 dilution, zero positive cash flow
- 2
All-in cost to mine a bitcoin exceeds $140k for Riot — the math doesn't math post-halving
- 3
Texas regulatory risk rising (SB 1751 revival, Navarro County tax abatement rejection)
Primary demands
- Sell Riot shares
- Gain bitcoin exposure via low-fee BTC ETFs instead of a dilution-prone miner
- Scrutinize Riot's participation in Texas grid incentive programs
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Kazakhstan regulatory crackdown on bitcoin miners
- Kosovo regulatory crackdown on bitcoin miners
Notable slides (5)
Notes
Classic Kerrisdale short-report format — text-heavy research note with embedded charts and peer-comparison tables, not a slide deck. No explicit target price (typical of shorts). Memorable rhetorical moves: 'hamster wheel that spins faster every 4 years upon halving'; 'the math doesn't math on pubco miners' (quoted from industry consultant); highlighting Les's poker background and Yi's finance/software background as non-operational red flags. Core argument rests on four pillars: (1) post-halving unit economics >$140k/BTC, (2) $2.3bn serial dilution since 2020 with 18% YTD dilution, (3) Texas regulatory risk via SB 1751 and Navarro County rejection of Corsicana tax abatements, (4) spot bitcoin ETFs obviating the miner-as-BTC-proxy trade. Appendix addresses the May 2024 Bitfarms acquisition proposal (rejected) and includes the RIOT-BTC correlation collapse chart.