Bitcoin
Bitcoin Mining Bitfarm Shares Rise as Riot Takeover Turns Hostile
Bitfarms shares soared 17% on Thursday after the Toronto-based Bitcoin miner revealed plans to expand its presence in Pennsylvania as it tries to fend off a hostile takeover.
The company he said had entered into an agreement to develop its first large-scale mining site in the US, which will ultimately increase its total energy capacity to 648 megawatts (MW) by 2025. The new site – where construction is expected to begin immediately – could add 120 MW, Bitfarms said.
Bitfarms said it plans to rent the facility in Sharron, Pennsylvania, where computers will constantly perform complex calculations in verifying Bitcoin transactions. Poised to consume large amounts of energy, Bitfarms praised the site for its “competitive electricity supply.”
Sitting on the so-called Pennsylvania-New Jersey-Maryland interconnection, Bitfarm president and interim CEO Nicolas Bonta said access to the largest U.S. wholesale electricity market “improves [Bitfarm’s] geographic diversification.”
Bitfarms said access to the 11,200-square-foot U.S. warehouse was paid for by issuing 1.5 million common shares. Listed on the Nasdaq stock exchange, Bitfarm’s share price (NASDAQ:BITF) has risen about 140% in the past year to about $2.81 at the time of writing.
Meanwhile, the company tries to combat Riot Platforms, which announced earlier this month that it accumulated 12% of Bitfarm’s outstanding shares.
Accusing Bitfarm’s board of directors of “poor corporate governance,” Riot said it intended to call a meeting of Bitfarm shareholders to appoint more independent and qualified directors.
The change was received harshly by Bitfarms, which subsequently he said that Riot’s proposal “significantly undervalues Bitfarms and does not serve the best interests of shareholders.” The conclusion was reached by a special committee of independent directors, Bitfarms emphasized.
“Attacking Bitfarms’ governance is not only hypocritical, but is a thinly veiled ploy to achieve Riot’s selfish agenda and attempt to acquire Bitfarms at a discount,” he continued. “Riot did not act in good faith.”
Riot accused Bitfarms of poor governance again as ridiculed a so-called poison pill, in which Riot would allegedly be prevented from owning 15% of Bitfarm’s common shares without making a “formal takeover offer” to buy all of them in the Toronto-based Bitcoin mining company.
Poison pills are a common defense tactic in the business world, where a company takes steps to make its shares less attractive to purchase and discourage potential acquirers.
“Rather than engage with us privately and in good faith, Bitfarms responded by implementing an off-market poison pill,” Riot CEO Jason Les said in a statement. “We will continue to press to resolve the serious corporate governance issues at Bitfarms.”
Edited by Ryan Ozawa.