Riot Platforms a Bitcoin mining company increases its ownership in Bitfarms to 12

Riot Platforms, a Colorado-based crypto mining company, has recently acquired a 12% stake in its rival Bitfarms, despite facing pressure from Kerrisdale Capital. In a press release on Jun. 5, Riot Platforms announced that it had purchased 1,460,278 common shares of Bitfarms, making it the beneficial owner of approximately 12% of the company. This acquisition, which was done at $2.45 per share, cost Riot Platforms over $3.5 million in total.

Following the purchase, Riot Platforms revealed its plans to call a special meeting of Bitfarms’ shareholders. During this meeting, Riot Platforms intends to nominate several well-qualified and independent directors to the Bitfarms board, citing concerns about the board’s history of poor corporate governance.

This strategic move by Riot Platforms comes as Kerrisdale Capital exerts shorting pressure on the company. Kerrisdale Capital recently disclosed a short position in Riot Platforms, highlighting issues with the company’s equipment sourced from China and operational concerns. This caused Riot Platforms’ shares to decline by up to 9% to $8.84. However, following the announcement of its increased stake in Bitfarms, Riot Platforms’ share price rebounded to $9.65, according to data from Google Finance.

In May, Riot Platforms made a $950 million acquisition bid for Bitfarms, alleging that the founders of Bitfarms were not acting in the best interests of all shareholders. Riot Platforms claims that its proposal, initially submitted privately in late April, was rejected by the Bitfarms board without meaningful discussion. In response, Bitfarms stated that Riot Platforms’ offer significantly undervalued its growth prospects. Bitfarms also mentioned that a special committee had requested customary confidentiality and non-solicitation protections, to which Riot Platforms did not respond.

In other news, a report revealed that Riot Platforms’ Bitcoin mining output surged by 19% in 2023.