- Riot Platforms has solidified its intentions in the crypto mining sector with a strategic acquisition.
- Riot continues to extend its influence by purchasing significant shares in Bitfarms.
- Riot Platforms’ aggressive expansion strategy sparks a noteworthy defensive reaction from Bitfarms.
Riot Platforms advances its takeover plans with significant acquisition, stirring defensive measures from Bitfarms amidst rising hash rates and internal conflicts.
Riot Increases Stake in Bitfarms
In a decisive move, Riot Platforms has acquired an additional 1,432,063 shares of Bitfarms, finalized on June 10 at approximately $2.7 per share. This acquisition represents an investment of around $3.87 million, elevating Riot’s total shareholding in Bitfarms to approximately 57.62 million shares, or about 14% of the company.
Bitfarms Employs Defensive Measures
This purchase is part of Riot’s broader attempt to take over Bitfarms. Last month, Riot proposed a $950 million bid to acquire Bitfarms. On May 28, Riot secured a 9.25% stake, establishing itself as the company’s largest shareholder. Following this, on June 5, Riot acquired an additional 1.5 million shares, further consolidating its position.
In an effort to counteract Riot’s aggressive acquisition, Bitfarms has employed a “poison pill” strategy. This defensive measure, enacted earlier this week, is designed to prevent the takeover by diluting Riot’s ownership stake. Should any entity acquire more than 15% of Bitfarms shares between June 20 and September 10, Bitfarms will issue new shares to dilute that entity’s ownership.
Riot Platform’s CEO Criticizes Bitfarms’ Defensive Strategy
Jason Les, CEO of Riot Platforms, has openly criticized Bitfarms’ defensive tactics. In a statement released Wednesday, Les remarked, “Rather than engaging with us privately and in a constructive manner, Bitfarms has opted for an off-market poison pill with a triggering threshold well below the customary 20%.”
Corporate Governance Concerns
Les further accused the Bitfarms Board of entrenchment and a disregard for shareholder interests, harkening back to the recent ousting of company co-founder Emiliano Grodzki by the shareholders, which occurred less than two weeks ago. “This action further exposes the Bitfarms Board’s entrenchment and neglect for its shareholders’ perspectives,” Les asserted. He called for the resignation of Chairman and interim CEO Nicolas Bonta, citing poor corporate governance under Bonta’s leadership since 2018.
Les emphasized Riot’s commitment to addressing the significant corporate governance issues at Bitfarms and ensuring shareholder voices are heard. As part of this initiative, Riot Platforms plans to request a special meeting of Bitfarms shareholders to nominate several independent directors to the board.
Conclusion
Riot Platforms’ latest acquisition marks a critical phase in its takeover bid for Bitfarms, resulting in notable defensive reactions and highlighting internal conflicts within Bitfarms’ leadership. As the dynamics unfold, stakeholders are keenly watching to see how these developments will influence both companies’ futures and the broader crypto mining landscape.
