Riot Platforms warns Bitfarms against moves to solidify control

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As a seasoned crypto investor with over two decades of experience in the financial markets, I’ve seen my fair share of corporate drama. The ongoing saga between Riot Platforms and Bitfarms is a classic example of the power struggle that can occur when investors feel their interests are not being properly represented.

Riot Platforms encourages Bitfarms shareholders to support additional board modifications, cautioning the company against any actions aimed at securing the existing board’s position.

In a call to action, Riot Platforms, a Bitcoin (BTC) miner, has asked Bitfarms’ shareholders to back proposed changes to the company’s board during the upcoming special meeting on October 29. The goal is to address Bitfarms’ current governance issues and ultimately increase value for all shareholders by improving its management structure.

On September 3rd, Riot Games, with the largest ownership (19.9%) at Bitfarms, voiced apprehensions about the management policies at Bitfarms. They emphasized the importance of introducing new viewpoints to boost the value for its shareholders.

In the letter, Riot voiced concerns about Bitfarms’ alleged defensive strategies aimed at fortifying its current board, such as the recent takeover of Stronghold Digital Mining Inc. valued at $175 million. Riot found this transaction questionable in timing and conditions, implying that it may have been deliberately structured to favor long-standing directors who prioritize preserving their positions.

Riot pushes for deeper governance reforms at Bitfarms

Riot criticized recent board adjustments at Bitfarms, stating they were “quick reactions” instead of adequate solutions for the underlying governance problems. Although it recognized the departure of two Bitfarms co-founders and the appointment of new management, Riot insisted that these actions did not go far enough to address the issues at hand.

“It’s evident that Bitfarms would benefit from having more directors who are completely impartial, boasting the necessary experience and skills. These individuals would help shape future strategic decisions in a way that serves the interests of all shareholders optimally.”

Riot Platforms

In the course of their campaign, Riot Games decided to cut down its proposed number of new board members from three to two. They nominated Amy Freedman and John Delaney as replacements for current board members. The letter ended with a warning to Bitfarms, cautioning them against taking actions that would negatively dilute the shares of all Bitfarms’ shareholders. This suggests that Riot is prepared to take action against directors if they choose to do so.

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2024-09-03 16:21