Source: Investing Published 09/03/2024, 13:57
Castle Rock, Colorado – Riot Platforms, Inc. (NASDAQ: RIOT), a major shareholder of Bitfarms Ltd. (NASDAQ/TSX: BITF), has issued an open letter to Bitfarms shareholders, calling for further changes to the company’s board of directors to enhance shareholder value. Riot, which owns approximately 19.9% of Bitfarms’ shares, has been vocal about its concerns over governance issues and the need for a comprehensive overhaul of the cryptocurrency mining company’s board of directors. In its push for change, Riot has already influenced the resignation of two of Bitfarms’ three founders from the board. Following public pressure from Riot and a shareholder vote, Emiliano Grodzki resigned from his position, and Nicolas Bonta was replaced by Ben Gagnon as CEO and board member. Fanny Philippe has also been appointed to the board during this transition period.
Despite these changes, Riot insists they are not enough to correct what it describes as “broken governance.” The company has reduced its proposed list of new directors from three to two, nominating Amy Friedman and John Delaney to replace co-founder Andres Finkelstein and Fanny Philippe. Riot believes the new candidates will bring the necessary independent perspectives to the board, emphasizing the importance of this ahead of the special meeting scheduled for October 29.
Riot has also criticized recent actions by Bitfarms, including the failed off-market acquisition, and the timing and terms of Bitfarms’ proposed acquisition of Stronghold Digital Mining, Inc. Riot argues that these decisions are not in the best interests of shareholders and may be attempts to entrench the current board’s position.
Riot has cautioned Bitfarms against any further defensive actions that could harm shareholders’ interests, and has expressed its intent to hold current board members accountable for any such actions.
The letter concludes by calling on Bitfarms to cease its defensive tactics and allow shareholders to have a say at the upcoming special meeting. Riot looks forward to fielding its candidates and believes their election could lead to a “better Bitfarms.”
This story is based on a press release from Riot Platforms, Inc.
In other recent news, bitcoin mining company Riot Platforms has increased its stake in rival Bitfarms to 18.9%, acquiring an additional 1 million common shares. The strategic move comes amid ongoing tensions between the two companies, after Riot withdrew a previously unsolicited offer to acquire Bitfarms for $950 million. Bitfarms had rejected the offer, implementing a “poison pill” strategy to protect against a potential takeover.
In other developments, Bitfarms reported a revenue decline of $42 million and a net loss of $27 million in its Q2 2024 earnings call. Despite this, the company is bullish on its plans to diversify into the high-performance computing and artificial intelligence sectors, backed by a strong liquidity position of $195 million. Bitfarms is fully funded to achieve its targets in the exahash and petahash sectors by 2024 and 2025, respectively, and is actively exploring growth opportunities in the United States.
These latest developments underscore the strategic moves and financial performance of both Riot Platforms and Bitfarms in the competitive Bitcoin mining landscape.
InvestingPro Insights
In light of Riot Platforms, Inc. calling for changes within the board of directors of Bitfarms Ltd., investors may be keen to understand the financial health and market sentiment surrounding Bitfarms. According to InvestingPro data, Bitfarms’ market cap is around $977.91 million, providing a sense of the company’s size in the competitive crypto mining landscape.
