Bitfarms Ownership Shift: Riot Platforms Boosts Stake

TLDR

Riot Platforms increased its stake in Bitfarms to 18.9%
Riot bought 1 million additional shares of Bitfarms at about $2.28 per share
Riot now owns 85.3 million shares of Bitfarms
Riot has requested a special shareholder meeting to propose changes to Bitfarms’ board
These events follow Riot’s earlier $950 million acquisition offer, which Bitfarms rejected

Riot Platforms, Inc. has increased its ownership stake in Bitfarms Ltd., a Canadian Bitcoin mining company, to 18.9%. This move comes as part of Riot’s ongoing efforts to gain more influence over Bitfarms’ operations and strategic direction.

On August 13, 2024, Riot purchased an additional 1 million common shares of Bitfarms through normal course purchases on the Nasdaq Stock Market and other open market trades.

The shares were acquired at an average price of about $2.28 per share, for a total investment of approximately $2.28 million. This recent purchase has increased Riot’s total holdings in Bitfarms to 85,293,054 common shares.

The increased stake follows a series of events that have highlighted tensions between the two companies. In April, Riot made an unsolicited offer to acquire Bitfarms for $950 million, which Bitfarms rejected, deeming it too low.

In response to this takeover attempt, Bitfarms adopted a “poison pill” defense strategy to prevent hostile takeovers.

Despite withdrawing its initial acquisition proposal, Riot has continued to push for changes in Bitfarms’ leadership. In June, Riot requisitioned a special shareholder meeting to propose the removal of certain Bitfarms directors and their replacement with independent candidates.

This boardroom battle has already seen some results, with Bitfarms announcing the departure of its co-founder and chair, Nicolas Bonta, who was one of the directors Riot sought to replace.

Riot has stated that it will continue to review its investment in Bitfarms, taking into account various factors such as market conditions, Bitfarms’ financial position, and potential strategic opportunities.

Depending on these factors, Riot may further increase or decrease its stake in Bitfarms and might even propose a revised acquisition plan in the future.

In compliance with Canadian securities laws, Riot Platforms will file an Early Warning Report detailing its increased ownership and future intentions regarding Bitfarms. This report will be available on SEDAR+, Canada’s electronic document filing and retrieval system for securities documents.

While focusing on its involvement with Bitfarms, Riot has also been expanding its own operations. The company recently acquired Block Mining in Kentucky for $92.5 million, a move that increases its hash rate and expands its geographical presence beyond Texas into new energy markets.

Riot reported a 45% increase in Bitcoin production for July, producing 370 BTC despite stagnating cryptocurrency prices.