Riot Blockchain reports massive Q2 gains
By Daniel Tyson
17:20, 24 August 2021
Riot Blockchain reported stupefying revenues for the second quarter of 2021 due largely to the May acquisition of Whinstone and mining revenues.
The company’s mining revenue increased by 1,540% to $31.5m during Q2 versus $1.9m during the same period in 2020, according to a company statement.
In mid-day trading Tuesday, the company’s stock was trading at $36.35, up 1.74%, but nowhere near its 52-week high of $79.50. It closed Monday at $35.73.
Bitcoin was trading at $48,079 per US dollar Tuesday at noon EST, down significantly from its April 14 high of $62,382.
Riot Blockchain’s spreadsheets show prodigious growth during the quarter, especially in its bitcoin mining-related segment, adding a 70% increase to its mining revenue, which resulted in Riot producing $19.3m of net income.
These are heady figures compared to same period last year when Riot reported an overall net loss of $10.6m.
Whinstone US
Company executives gave credit for the revenue increase to the May purchase of Whinstone US, which accounted for $2.9m in revenue for the quarter, despite only being operational for one month after the acquisition.
“With the successful acquisition of Whinstone US, the company’s growth prospects have been significantly de-risked, and future financial opportunities are very exciting,” said Jason Le, chief executive officer at Riot.
“Riot is aggressively expanding its capacity at Whinstone, which is expected to provide the critical infrastructure necessary to successfully execute on driving continued growth for the company,” he said.
The acquisition created one of the largest hosting and mining companies in North America. According to the release, Riot provides data centre hosting of bitcoin mining equipment for institutional clients.
Riot has its headquarters in Castle Rock, Colorado, and the Whinstone facility operates out of Rockdale, Texas. The company also has mining equipment operating in upstate New York under a co-location hosting agreement with Coinmint.
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More time
Earlier this month, Riot Blockchain asked the US Security and Exchange Commission (SEC) for more time to file the quarterly report until Whinstone finished an internal audit.
In the file, Riot Blockchain explains it, “requires additional time to complete certain disclosures and analyses” of Whinstone US’s revenue.
Bumpy history
Some could see Q2’s numbers as Riot Blockchain redeeming itself after a turbulent history in leadership.
In 2018, Riot Blockchain was rocked by charges brought by the SEC against two of its most important leaders for “long-running fraudulent schemes” that racked up more than $27m. Along with eight others, then-CEO John O’Rourke and Barry Honig, once Riot’s largest shareholder, where labelled “microcap fraudsters” by the SEC.
The charges are not related to Riot Blockchain, and it is not named or referred to in the complaint, according to media reports.
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