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Riot Platforms: Is the Latest Crypto Boom Fueling Stock Surge?

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Written by Timothy Sykes Reviewed by Jack Kellog Fact-checked by Ellis Hobb
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Riot Platforms Inc. is gaining momentum, propelled by optimistic sentiment as highlighted by recent news portraying favorable market conditions and technological advancements. On Friday, Riot Platforms Inc.’s stocks have been trading up by 6.99 percent.

Recent Market Moves and Impact

  • Bitcoin’s price skyrocketed to near $95,000, indicating a bullish market for related stocks, potentially leading to gains for Riot Platforms Inc.
  • Stifel has lifted Riot Platforms’ target price to $20, forecasting top-line and margin growth following Bitcoin’s price jump.
  • With cryptocurrencies on the rise, Riot Platforms, aligned closely with Bitcoin, might benefit from the upward trend.
  • A general market increase has been observed, with the CoinDesk Market Index climbing 2%, which could affect Riot positively.

Candlestick Chart

Live Update At 11:37:13 EST: On Friday, November 29, 2024 Riot Platforms Inc. stock [NASDAQ: RIOT] is trending up by 6.99%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Quick Overview of Riot Platforms Inc.’s Financial Performance

“”As millionaire penny stock trader and teacher Tim Sykes, says, “The goal is not to win every trade but to protect your capital and keep moving forward.” This mindset is crucial for anyone engaged in trading, where the markets are unpredictable, and the potential for losses always exists. Instead of focusing solely on winning each trade, successful traders emphasis on risk management and preservation of capital. By doing so, they ensure they can withstand the market’s volatility and continue to participate over the long term, ultimately increasing their chances for success.”

The recent financial reports reveal a complex picture for Riot Platforms Inc. Let’s dive deep into the numbers to get a clearer perspective. Riot recorded losses in recent quarters—both in revenue and net income. The EBIT margin stands at -120.5%, indicating that Riot is spending far more than it generates in core earnings. Yet, unusually for such a situation, the company retains a strong balance sheet with a current ratio of 5.7, suggesting it has ample liquid assets to handle short-term liabilities.

More Breaking News

Looking at Riot’s revenue streams, the company lags with a gross margin of 26.1%, signifying challenges in controlling production costs or elevating sale prices. However, the revenue shown in terms of actual figures, clocks in at about $280.68M, thanks to strategic positioning in the booming Bitcoin mining arena.

Financial Performance Reflections and Risks

The financial reports depict that Riot’s free cash flow is negative, amounting to -$131.84M, which may indicate challenges in sustaining its operating model without external financing. Despite these risks, investors and analysts, eyeing the unrestrained growth in the cryptocurrency space, might expect Riot to eventually benefit from industry-wide tailwinds.

The enterprise value, marked at around $3.6B, underlines significant investor confidence in platform capabilities and future profitability. But perhaps surprisingly, certain stock valuation multiples such as the price-to-sales ratio and enterprise value suggest that its actual book value could signal overvaluation at current levels. Yet, with Bitcoin’s spikes and overall market enthusiasm, Riot may be in a strategic long-term play rather than short-term profitability.

Highlights from Key Articles and Market Indicators

The cryptocurrency space is experiencing immense momentum, not just with Bitcoin’s surge but also in broader digital asset markets. This signals positive ripple effects for businesses like Riot, heavily tied to the sector’s heartbeat.

Bitcoin’s meteoric climb past $91,000 up to a new record high near $100,000 has carved out some conspicuous optimism among investors. Riot, in essence, represents a pure-play digital growth story, analogous to a bet on the broader crypto industry’s future.

Market commentators suggest that continuing crypto rallies may spur another round of strong buying interest in Riot. Nevertheless, the prevailing sentiment towards Riot’s financial health and its ongoing exposure to volatile Bitcoin prices should not be overlooked.

Envisaging Riot’s Market Path Forward

In understanding Riot’s current position, the ongoing trends within the crypto markets hold promise. Bitcoin’s unstoppable march upwards incentivizes further investments in mining capacity expansion, suggesting potential room for Riot to capitalize on efficiencies and possibly translate these actions into more favorable financial outcomes.

The leap in Bitcoin’s value alters many short-term plays, such as intra-day trading, but Riot’s strategy seems to banking more on longer-term returns. As millionaire penny stock trader and teacher Tim Sykes, says, “The goal is not to win every trade but to protect your capital and keep moving forward.” If the firm succeeds in maintaining its crypto alignment while scaling its tech prowess, there could be material payoffs.

In conclusion, even as speculative nodes buzz favorably for Riot Platforms amid the crypto eruption, the company must leverage its market posture intelligently. Traders are advised to digest the recent financial metrics and align prospective expectations with realistic strategic initiatives focused on sustainable growth. Keeping an eye on Bitcoin prices remains imperative for appreciating Riot’s stock outlook.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”