As an analyst with a background in corporate finance and mergers and acquisitions, I find this situation between Bitfarms and Riot Platforms fascinating but also concerning. The intense battle for control of Bitfarms’ shares is reminiscent of hostile takeover attempts I have seen in the past, and it raises several red flags.
Over the past month, Bitfarms’ share value has surged by over 47%, fueled by an intense dispute between the cryptocurrency mining company and its potential purchaser, Riot Platforms.
The story took off in May as American mining company Riot made a proposal to buy Canada’s Bitfarms for an astounding $950 million. Despite this proposition being rejected by Bitfarms, Riot has since then been amassing shares of the Canadian firm from the open market, now holding a significant 13.1% stake worth over $111 million.
Bitfarms has taken steps to thwart Riot’s hostile takeover bid. On Wednesday, the company implemented a “poison pill” shareholder rights plan in response. This defensive measure aims to hinder Riot from accumulating over 15% of Bitfarms’ shares. If Riot exceeds this limit, Bitfarms will issue new shares to existing stockholders, effectively diluting Riot’s stake and slowing its progress toward gaining control.
As a researcher investigating recent developments at Riot and Bitfarms, I’ve come across some intriguing information. On June 12, Riot’s CEO, Jason Les, publicly expressed strong disagreement with certain actions taken by Bitfarms. He argued that these actions breached “set legal and governance norms.” Les went on to criticize Bitfarms’ interim CEO, Nicolas Bonta, for exhibiting “subpar corporate governance,” and urged for his dismissal.
As a concerned crypto investor, I strongly advocate for change at Bitfarms. In my latest communication to the board, I urged them to take action and facilitate the resignation and removal of Chairman and interim CEO Nicolas Bonta. He has held these positions since 2018, and under his leadership, the company’s corporate governance practices have left much to be desired. I believe this is a crucial first step in addressing shareholders’ concerns and paving the way for a more effective and responsible management team.
Riot CEO Jason Les said
Despite Bitfarms’ assertion that its poison pill was designed to facilitate regulatory processes regarding Riot’s takeover bid, both parties remain steadfast in their stance.
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2024-06-13 00:36