Riot Acquires 13% Bitfarms Stake

Riot Platforms’ acquisition attempt has resulted in a more than 56% increase in Bitfarms’ stock price on the Nasdaq over the past 30 days.

Bitfarms’ proposal to prevent Riot Platforms from acquiring a greater than 15% stake in a corporate acquisition is opposed by Jason Les, the CEO of the cryptocurrency mining firm.

Riot disclosed in a filing with the United States Securities and Exchange Commission on June 11 that it had acquired approximately six million common shares of Bitfarms in three distinct transactions. Riot held a 13.1% stake in Bitfarms due to the shares, valued at over $111 million at purchase, and its previous acquisitions.

On June 10, Bitfarms disclosed a shareholder rights plan proposing a “poison pill” strategy as a precaution against a Riot acquisition. The strategy aims to impede Riot’s initial plans for a merger by diluting the value of its shares, thereby inhibiting the acquisition of a 15% or more significant stake in Bitfarms.

Les asserted in a statement on June 12 that the Bitfarms plan was “in direct conflict with established legal and governance standards” due to the reduction of the threshold to 15% from the “customary 20%.”

As per Bitfarms, the shareholder plan continued to permit Riot to proceed with its acquisition plans “in compliance with the relevant Canadian securities laws.”

In May, the mining firm based in Canada was offered an acquisition by Riot, a company headquartered in the United States, for $950 million. As of May 24, this price represented a 24% premium to Bitfarms’ one-month volume-weighted average share price.

The acquisition plans have resulted in a more than 56% increase in Bitfarms’ stock price on the Nasdaq over the past 30 days.

After filing a lawsuit against the mining firm, Bitfarms announced in May that its former CEO, Geoffrey Morphy, would resign. Nicolas Bonta has been serving as the interim president and CEO of the company until a replacement for Morphy is selected.

Les urged the board to remove Bonta, asserting he “bears direct responsibility for [Bitfarms’] poor corporate governance practices.”