The company lost 14 cents a share on the adjusted basis used by Wall Street, according to Bloomberg, compared with analysts’ consensus for a 4-cent profit. There was a net loss of $366.3 million after a gain of $19.3 million in the 2021 period. In spite of the struggles, sales were actually slightly higher than Wall Street expected, $72.9 million. Bitcoin
Riot took a charge of $349.1 million against earnings to completely write off the goodwill booked in the purchases last year of Whinstone US and ESS Metron, recognizing reduced valuations of assets in the crypto mining sector, including company equity and currencies such as bitcoin. The acquisitions were Whinstone, a bitcoin miner, for $460 million and ESS Metron, a maker of electrical equipment and a supplier to Whinstone, for about $50 million in cash and shares.
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Management offered a dour outlook for the bitcoin sector, which after the cryptocurrency’s “dramatic” rise in recent years “caused many companies to over-leverage themselves, operating in an unsustainable way,” according to the company’s earnings filing with the U.S. Securities and Exchange Commission. That could play into its long-term plans as Riot invests in its mining operations and relies on liquidity that includes $270.5 million of cash to see it through the crypto winter as its industry consolidates.
Along with the charges from the two acquisitions, Riot had a $99.8 million impairment of its cryptocurrency holding