As an experienced financial analyst, I believe that Riot Platforms’ decision to call for a special shareholder meeting and nominate new directors for Bitfarms is a strategic move aimed at bringing about much-needed change to the company. The recent events, including the implementation of a shareholder rights strategy by Bitfarms to restrict future acquisitions and the resignation of its former CEO, have created uncertainty and instability within the organization.
Riot Platforms, Inc., which holds the most shares in Bitfarms Ltd., has announced its intention to convene a gathering of Bitfarms’ shareholders for the purpose of electing new directors to replace the current Board.
Bitfarms Announces Special Shareholder Meeting and Proposes Three New Directors for Board Overhaul
— Riot Platforms, Inc. (@RiotPlatforms) June 24, 2024
Based on the June 24th press release, I, as a researcher, can report that Riot holds a significant stake of 14.9% in Bitfarms. Notably, Bitfarms recently implemented a shareholder rights plan to limit future acquisitions. In response, Riot has announced its intention to replace three board members and prevent any new directors from being appointed following this announcement.
At the upcoming special gathering, shareholders will be given the chance to cast their votes on the suggested amendments. Additionally, Riot plans to exclude any further director nominees brought forth post-announcement. Among the three proposed independent candidates are John Delaney, Amy Freedman, and Ralph Goehring.
The company announced that Riot has officially withdrawn its earlier offer to purchase all common shares of Bitfarms for US$2.30 each. However, Riot remains open to collaborating with a revamped Bitfarms Board to explore mutually advantageous merger possibilities between the two companies.
The price of Bitfarms’ Nasdaq-listed stock experienced a significant surge of over 36% over the past month due to takeover proposals. However, it saw a nearly 6% decline in the past day, despite our attempt to reach out to Bitfarms for comment via Cointelegraph, with no response received as of publication.
The mining corporation expressed disappointment that Bitfarms’ board refused to cooperate in a productive manner during the takeover negotiations. Additionally, they criticized Bitfarms for mishandling their CEO succession plan.
Previously, Geoffrey Morphy, the ex-CEO of Bitfarms, stepped down in May following his instigation of a legal action against the firm. Currently, Nicolas Bonta serves as the interim president and CEO, but if the shareholder appeal gains traction, he could potentially lose one of Riot Blockchain’s three board positions.
The proposed restructuring of Bitfarms’ board marked the next step in Riot’s scheme to gain control over the mining company. Starting with a $950 million buyout proposal in May, Riot progressively amplified its stake until Bitfarms activated its ‘poison pill’ defense, capping any ownership at 15%.
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2024-06-24 23:17