3rd Largest Wall Street Bitcoin Miner Raises Bitfarms Stake, Takeover Defense Intensifies

Riot
Platforms Inc. (NASDAQ: RIOT), the third biggest Bitcoin (BTC) miner on Wall
Street, has increased its ownership stake in rival Bitfarms Ltd (NASDAQ: BITF)
to 18.9%, further intensifying its efforts to reshape the Canadian miner’s
board of directors.

Riot Platforms Boosts
Stake in Bitfarms, Continues Push for Board Changes

In a
regulatory filing on Tuesday, Riot disclosed the acquisition of an additional 1
million Bitfarms common shares through open market purchases. The transaction,
valued at approximately $2.28 million, brings Riot’s total holdings to 85.3
million shares, up from the previous 84.3 million.

The move
comes amid ongoing tensions between the two cryptocurrency mining firms. In
April, Riot made an unsolicited $950 million offer to acquire Bitfarms,
which was promptly rejected as undervaluing the company. Bitfarms subsequently
adopted a “poison pill” defense to ward off potential hostile
takeover attempts.

Riot Platforms, Inc. Reports Beneficial Ownership of 18.9% in Bitfarms Ltd.For more information, please visit: https://t.co/rUt5EroO5I.

— Riot Platforms, Inc. (@RiotPlatforms) August 13, 2024

While Riot
withdrew its initial acquisition proposal, the company has maintained pressure
on Bitfarms’ leadership. In June, Riot requisitioned a special shareholder
meeting, seeking to remove certain Bitfarms directors and replace them with
independent candidates.

The
boardroom battle appears to be yielding results. Earlier on Tuesday, Bitfarms
announced the immediate departure of co-founder and chair Nicolas Bonta, one of
the three board members Riot had targeted for replacement.

In the
meantime, the company appointed Liam Wilson as Chief Operating Officer, and
early last month promoted Ben Gagnon to the position of President. Previously,
he held various roles including Chief Mining Officer and Director of Business
Development.

“Founding Bitfarms and overseeing the Company’s growth has been the highlight of my professional career. Now is the right time for me to step down and for Ben to join the Board,” Bonta remarked.

Riot
certainly has a market advantage here, being one of the three largest
cryptocurrency miners on Wall Street. Its market capitalization exceeds 2
billion dollars, more than double that of Bitfarms.

Riot
indicated it would continue to review its investment in Bitfarms and may
consider further actions, including adjusting its position or proposing
additional changes to the board composition.

Riot Boosts BTC Production

Meanwhile, the company achieved
success in acquisitions elsewhere. At the end of July, Riot completed the
purchase of Kentucky-based Block Mining for $92.5 million. This acquisition
significantly increases Riot’s hash rate and broadens its geographical presence,
extending beyond Texas into new energy markets.

The transaction, finalized on
July 23, included an $18.5 million cash payment and $74 million in Riot common
stock. Additionally, there is a potential earn-out of up to $32.5 million
available until 2025, dependent on Block Mining securing further power purchase
agreements.

This month, Riot also released
information about its Bitcoin production for July. The company reported a 45%
increase in mining output, producing 370 BTC. This figure is up significantly
from the 255 BTC mined in June, despite a sharp decline in Bitcoin prices at
that time. Although this represents a 10% decrease compared to July of the
previous year, which saw 410 BTC mined, the earnings from the Bitcoins mined
last month are projected to be substantially higher when considering the
average prices during these periods.

This article was written by Damian Chmiel at www.financemagnates.com.
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