Riot Raises $230 Million in Equity to Scale Bitcoin Mining

Also notable in Riot's Q3 filing was the negative cost of bitcoin production

Riot Platforms, one of the largest bitcoin mining operations in North America, has raised $230 million through stock offerings since July to fund the expansion of its bitcoin mining infrastructure.

According to Riot’s 10-Q filing for the third quarter on Wednesday, the company raised about $130 million from its at-the-market offerings. In the period following Sept. 30 up to Nov 6, Riot further sold 10.2 million shares of its common stock, raising an additional $100 million. Year-to-date, Riot has amassed over $400 million through equity sales.

Simultaneously, during Q3, Riot reported a net spending of $125 million on bitcoin mining-related capital expenditures, including equipment deposits, property acquisitions, and ongoing construction. This expenditure exceeded the combined net spending of $110 million in the preceding two quarters.

In June, Riot signed a pre-order for 7.6 EH/s of WhatsMiner’s M56S+ and M56S++ equipment for a total consideration of $162 million. On Tuesday, Riot said that a portion of the initial order, around 6,000 M56S++ miners, would be replaced with the newly launched M66 miners.

The newly acquired equipment is intended for use at Riot’s Corsicana facility in Texas, which, upon completion, is expected to boast a capacity of one gigawatt for bitcoin mining and hosting.

Riot’s estimates indicate that the total cost for the first phase of the Corsicana project will reach $333 million, encompassing expenses for land acquisition, substation construction, transmission, ancillary structures, and four immersion-cooling infrastructure buildings. As of Q3, Riot had already incurred $155.2 million in expenses, with an anticipated additional $128 million in Q4 and $50 million in Q1 2024.

Riot has been consistently resorting to share dilution as a means of funding its bitcoin mining expansion while retaining its bitcoin reserves. As of October 31, the company held 7,345 BTC on its balance sheet, with a total value of nearly $260 million.

Negative mining cost?

Notably, Riot’s Q3 filing also highlighted the impact of power curtailment credits on its cost of bitcoin production, as the chart below shows.

During this period, Riot's direct mining costs for producing 1,102 BTC amounted to $24.4 million (excluding depreciation and amortization), with power bills being the primary cost component. This translated to a cost of production of $22,177 per BTC. However, during the summer months, Riot participated in ERCOT's demand response program and temporarily shut down a substantial portion of its proprietary hashrate to support the grid.

In return, Riot received nearly $50 million in power curtailment credits, of which $31.2 million offset the power bills in its bitcoin mining business. This effectively meant that Riot mined Bitcoin in Q3 at a near-zero cost. The status of the remaining power credits and their applicability in subsequent quarters remained unclear.

Bitcoin mining site image via Riot