Riot Platforms Acquires 12% Stake in Bitfarms Ltd., Intends to Propose New Directors
Felix Pinkston Jun 06, 2024 01:41
Riot Platforms now holds a 12% stake in Bitfarms Ltd. and plans to nominate new directors to the board.
Riot Platforms Increases Ownership in Bitfarms
According to Riot Platforms, Inc. (NASDAQ: RIOT), the company has announced a significant increase in its ownership stake in Bitfarms Ltd. Riot now holds approximately 12% of the issued and outstanding common shares of Bitfarms, following the acquisition of 1,460,278 common shares on June 5, 2024.
The newly acquired shares were purchased on the Nasdaq Stock Market and other open market trades at a weighted average price of approximately US$2.45 per share, totaling around US$3.58 million.
Intentions to Influence Corporate Governance
Riot Platforms has expressed intentions to requisition a special meeting of Bitfarms’ shareholders. During this meeting, Riot plans to nominate several independent directors to Bitfarms' board, citing concerns over the current board’s corporate governance practices.
Prior to this acquisition, Riot held 46,370,162 common shares, representing 11.63% ownership. The recent purchase lifts Riot's stake to 47,830,440 common shares, now amounting to a 12% stake.
Future Plans and Potential Market Movements
Riot has indicated that it will continue to review its investment in Bitfarms. Future actions may include increasing or decreasing its stake, engaging in further market transactions, or considering other strategic moves. These decisions will be influenced by multiple factors, such as the financial position and strategic direction of Bitfarms, overall market conditions, and other investment opportunities available to Riot.
Broader Context in the Crypto Mining Sector
This move by Riot Platforms highlights a growing trend among major players in the Bitcoin mining industry to consolidate and influence corporate governance. Recently, other mining firms have also been seen making strategic acquisitions to bolster their market positions.
Riot Platforms operates Bitcoin mining facilities in central Texas and has electrical switchgear engineering and fabrication operations in Denver, Colorado. The company aims to be a leading Bitcoin-driven infrastructure platform.
Legal and Regulatory Considerations
Riot’s acquisition and subsequent intentions are subject to Canadian securities laws, including Part 3 of Canadian National Instrument 62-103 and Part 5 of Canadian National Instrument 62-104. Riot will file an Early Warning Report in compliance with these regulations.
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