Bitcoin
Bitcoin mining company Riot Platforms acquires 12% stake in Bitfarms
Colorado-based crypto mining company Riot Platforms has acquired ownership of a 12% stake in rival Bitfarms despite short selling pressure from Kerrisdale Capital.
Bitcoin mining company Riot Platforms said in one Press release on June 5, he acquired 1,460,278 common shares of Bit Farms, becoming the beneficial owner of approximately 12%. The company said the latest purchase, at $2.45 per share, cost Riot more than $3.5 million in total.
Following the acquisition, Riot declared its intention to call a special meeting of Bitfarms shareholders. At this meeting, Riot plans to nominate “several well-qualified and independent directors” to the Bitfarms board, citing “serious concerns regarding the board’s record of poor corporate governance.”
This move comes amid short selling pressure from Kerrisdale Capital, which recently released a short position in Riot, citing issues with Riot equipment coming from China and operational concerns, and causing Riot shares to fall as much as 9% to $8.84. However, Riot’s share price recovered to $9.65 following the announcement of its additional purchase of Bitfarms shares, according to data from Google Finance.
RIOT share price in dollars | Source: Google
At the end of May, Riot announced a $950 million takeover bid for Bitfarms, claiming that Bitfarms’ founders were not acting in the best interests of all shareholders. Riot claims that its proposal, initially presented privately in late April, was rejected by the Bitfarms board without substantive commitment.
Bit Farms he responded by stating that Riot’s offer “significantly undervalues” its growth prospects. The company added that a special committee requested “usual confidentiality and non-solicitation protections,” to which Riot did not respond.