Riot increases stake in Bitfarms with $2.2m share purchase

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As a seasoned analyst with over two decades of experience in the tech and finance sectors, I find myself intrigued by this latest chapter in the saga between Riot Platforms and Bitfarms. The acquisition of $2.2 million worth of Bitfarms shares is undoubtedly a strategic move by Riot, aiming to increase its influence and stake in the Canadian Bitcoin mining firm.

Riot is persistently expanding its ownership portfolio, with a recent purchase of $2.2 million worth of shares in the company Bitfarms.

Riot Platforms has declared the acquisition of 1 million common shares from its competitor Bitfarms, increasing its ownership in the Canadian Bitcoin mining company to around 18.90%. According to a press release on August 13th, these shares were obtained at an average price of $2.28 per share, amounting to approximately $2.3 million in total.

The latest share acquisition by Riot strengthens their control over Bitfarms, as they pursue takeover attempts initiated with a $950 million offer earlier this year which was later withdrawn due to lack of approval from Bitfarms’ board. With the recent purchase, Riot now owns close to 19% of all shares in Bitfarms. This development has led to an increase of 3.26% in Bitfarms’ share price, according to Google Finance data.

In the past, Riot has called for a specific gathering to suggest alterations to Bitfarms’ board, showing continuous involvement in deciding the company’s future plans. As these events unfold, Bitfarms has experienced management changes, with Ben Gagnon taking on the role of CEO and Brian Howlett being named as an independent chairman of the board.

As a researcher delving into the dynamic world of cryptocurrency mining, I’ve been following the intriguing developments surrounding Nicolas Bonta, one of the co-founders of Bitfarms and a key figure in the ongoing takeover struggle against Riot. Interestingly, Mr. Bonta has also chosen to step down from his position on the board. This move adds another layer to the unfolding narrative in this sector.

Bitfarms seeks new ways to counteract takeover bids

While dealing with regulatory hurdles and recent court decisions impacting shareholder rights due to a takeover offer, Bitfarms is implementing a “revised shareholder protection plan” aimed at ensuring equal consideration for all shareholders if an unexpected takeover occurs.

The revised strategy introduces steps to combat “stealth acquisitions,” a situation where a buyer quietly gathers 20% or more of the company’s stock through exceptions in purchase rules over a period. For the next six months, this plan permits current shareholders to obtain extra shares at a reduced price. This action will decrease the ownership stake of any potential buyer and secure the interests of all shareholders.

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2024-08-14 11:54