Riot Platforms, a cryptocurrency mining company, has increased its stake in Bitfarms to 13.1% by purchasing six million shares valued at over $111 million. This move aims to thwart a hostile takeover and was disclosed through a filing with the United States Securities and Exchange Commission on June 11.
Bitfarms responded with a ‘poison pill’ plan, capping ownership under 15% to prevent Riot from gaining further control. Riot’s CEO, Jason Les, criticized this defense, arguing it deviates from common legal standards where the threshold is typically 20%. Despite the controversy, Bitfarms’ stock surged by over 56% on the Nasdaq.
The takeover battle intensified as Bitfarms’ CEO Geoffrey Morphy resigned amidst legal turmoil, with Nicolas Bonta stepping in as interim president and CEO. Riot had previously offered a $950 million buyout, a 24% premium over Bitfarms’ average share price, aligning with its strategy to strengthen its market position.
The ongoing conflict highlights the strategic importance of control in the competitive cryptocurrency mining sector. The resolution of this battle could significantly impact both companies’ futures and the broader market dynamics.
