Morgan Stanley sees increased uncertainty around Marathon Digital Holdings’ expansion plans in Texas after Democrat Gina Hinojosa won the gubernatorial election. The bank said it would likely lower its probability estimates for the company’s future projects in the state. Hinojosa campaigned on pausing permits for new data centers and cryptocurrency mining operations until stricter regulations are in place.
The proposed shift raises regulatory risks for miners with major investments in Texas. Hinojosa has also proposed ending tax incentives and requiring companies to show their operations will not raise local electricity or water costs.
Bernstein also responded to the news, cutting its price target on Marathon from $17 to $10, citing heightened uncertainty in the Texas market.