Riot Blockchain acquires 12 stake in Bitfarms Bitcoin mining company
Riot Platforms, a cryptocurrency mining company based in Colorado, has recently acquired a 12% stake in rival Bitfarms despite facing pressure from Kerrisdale Capital. In a press release on Jun. 5, Riot Platforms announced that they had purchased 1,460,278 common shares of Bitfarms, making them the beneficial owner of approximately 12% of the company. The acquisition, which cost Riot over $3.5 million at $2.45 per share, marks a significant investment for the company.
Following the purchase, Riot Platforms expressed their intention to convene a special meeting of Bitfarms’ shareholders. During this meeting, Riot Platforms plans to nominate several qualified and independent directors to the Bitfarms board, citing concerns about the board’s history of poor corporate governance.
This move comes at a time when Kerrisdale Capital has been exerting shorting pressure on Riot Platforms, raising issues about the company’s equipment sourced from China and operational challenges. As a result, Riot Platforms’ shares experienced a decline of up to 9% to $8.84. However, the share price rebounded to $9.65 after the announcement of the additional Bitfarms share purchase.
In late May, Riot Platforms made a $950 million bid to acquire Bitfarms, claiming that the founders of Bitfarms were not acting in the best interests of all shareholders. Despite submitting the proposal privately in April, Bitfarms rejected it without engaging in substantive discussions. Bitfarms responded by stating that Riot Platforms’ offer undervalued their growth prospects and that they had requested confidentiality and non-solicitation protections, which Riot Platforms did not acknowledge.
Riot Platforms’ Bitcoin mining output experienced a surge of 19% in 2023, according to a recent report, showcasing the company’s continued growth and expansion in the cryptocurrency mining industry.
