Bitfarms (NASDAQ: BITF) stock surged in early Monday trade amid news that Riot Platforms seeks three board seats after a failed takeover bid.
Riot Platforms (NASDAQ: RIOT), a prominent Bitcoin miner and the largest shareholder in Bitfarms with nearly a 15% stake is pushing for significant influence at its rival through a bid for three board seats. This move comes after Bitfarms rebuffed Riot’s $950 million buyout offer and adopted defensive measures including a poison pill against a hostile takeover.
Reuters reported that Riot withdrew its acquisition offer on Monday but expressed willingness to engage with Bitfarms’ newly constituted board regarding potential transaction opportunities.
In response, Bitfarms issued the following statement,
“The Special Committee is disappointed that Riot declined to engage constructively and participate in the process, and instead has continued to take steps to attempt to undermine the integrity of the process and harm the interests of other Bitfarms shareholders.”
The conflict between the two companies escalated following Riot’s unsolicited buyout proposal in April, which Bitfarms rejected, citing undervaluation, and initiated a strategic review. Riot subsequently criticized Bitfarms’ corporate governance practices, setting the stage for a boardroom battle.
Crypto miners like Riot are actively pursuing growth opportunities to mitigate the impact of Bitcoin’s recent “halving” in April. This event, occurring approximately every four years, reduces miners’ rewards by half, prompting companies to explore strategic initiatives to sustain profitability.
Riot has called for a special shareholder meeting at Bitfarms to vote on its director nominees: John Delaney, an expert in government and public affairs; Amy Freedman, a former investment banker specializing in corporate governance matters; and Ralph Goehring, a seasoned CFO with expertise in financial, accounting, and tax affairs.
Riot asserts that these independent nominees will “help oversee the strategic alternatives process at Bitfarms.”
Bitfarms (NASDAQ: BITF) Stock Price Action
As of 10:59 a.m. (Eastern Time) Tuesday, BITF stock traded at $2.92, marking an 8.95% increase compared to the previous trading session.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
