Exclusive-D.E. Shaw takes stake in bitcoin miner Riot Platforms, sources say

By Svea Herbst-Bayliss

NEW YORK (Reuters) - Investment firm D.E. Shaw has built a position in Riot Platforms and may push it to make changes, two sources familiar with the matter said, making it the second activist shareholder to do so at the cryptocurrency mining company.

Reuters could not determine the size of D.E. Shaw's stake in Riot. Representatives for Riot and D.E. Shaw, which oversees $70 billion in assets, declined to comment.

D.E. Shaw's purchase of a stake comes after Starboard Value late last year took an undisclosed position in Riot, which processes bitcoin transactions and receives the cryptocurrency as payment. Riot has said that it has held talks with Starboard.

Starboard has pushed Riot to consider allotting some of its power capacity to artificial intelligence. Last week, Riot said it was launching a formal evaluation of potential AI/high-performance computing uses for its remaining power capacity at its Corsicana, Texas facility.

Riot, which is worth about $3.8 billion, last year sought to take over rival miner Bitfarms but the two did not agree to a sale, instead agreeing on changes to Bitfarms' board.

Shares in Riot closed at $10.95 on Tuesday, having climbed 5% since the start of the year.

Hopes have been high in the crypto industry that the sector will benefit during the Trump administration, which has sent encouraging signals that regulations might be relaxed.

D.E. Shaw, best known for employing quantitative investment tools to power returns, sometimes pursues an activist strategy but rarely runs public boardroom fights, preferring to negotiate with companies out of the limelight.

The fund took a position in Air Products and Chemicals late last year and agreed with activist investor Mantle Ridge Capital that the industrial gases company's chief executive needed to be replaced and that its capital should be allocated differently.

But instead of pushing its own board candidates, D.E. Shaw in October threw its weight behind Mantle Ridge, which proposed four directors and saw three elected to the nine-member board last week.

(Reporting by Svea Herbst-Bayliss in New York; Editing by Edwina Gibbs)

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