Riot Platforms Increase Ownership in Bitfarms
According to Riot Platforms, Inc. (NASDAQ: RIOT) is the company has announced a significant increase in its ownership stake in Bitfarms Ltd. Riot now owns approximately 12% of Bitfarms’ issued and outstanding common stock, following the acquisition of 1,460,278 common shares on June 5, 2024.
The newly acquired shares were purchased on the Nasdaq Stock Market and other open market transactions at a weighted average price of approximately US$2.45 per share, totaling approximately US$3.58 million.
Intentions to influence corporate governance
Riot Platforms has expressed its intention to call a special meeting of Bitfarms shareholders. At this meeting, Riot plans to nominate several independent directors to Bitfarms’ board, citing concerns about the corporate governance practices of the current board.
Prior to this acquisition, Riot owned 46,370,162 shares of common stock, representing an ownership of 11.63%. The recent purchase increases Riot’s stake to 47,830,440 common shares, which now amounts to a 12% stake.
Future plans and potential market movements
Riot has indicated that it will continue to review its investments in Bitfarms. Future actions may include increasing or decreasing its stake, entering into further market transactions, or considering other strategic moves. These decisions will be influenced by multiple factors, such as Bitfarms’ financial position and strategic direction, general market conditions and other investment opportunities available to Riot.
Broader context in the crypto mining sector
This move by Riot Platforms highlights a growing trend among major players in the Bitcoin mining industry to consolidate and influence corporate governance. Recently, other mining companies have also seen strategic acquisitions to strengthen their market positions.
Riot Platforms operates Bitcoin mining facilities in central Texas and has electrical switchgear and manufacturing operations in Denver, Colorado. The company aims to be a leading Bitcoin-driven infrastructure platform.
Legal and Regulatory Considerations
The acquisition of Riot and subsequent intentions are subject to Canadian securities laws, including Part 3 of Canadian National Instrument 62-103 and Part 5 of Canadian National Instrument 62-104. Riot will submit an Early Warning Report in accordance with these regulations.
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