Riot Platforms Increases Stake in Bitfarms with $2.28 Million Acquisition

Riot Platforms is actively expanding its portfolio while navigating its complex relationship with Bitfarms, a competing cryptocurrency mining company.

Recent Acquisition Details

On August 13, Riot Platforms announced a significant increase in its stake in Bitfarms. The company reported the acquisition of an additional 1 million common shares of Bitfarms through open market purchases, amounting to approximately $2.28 million. This move raises Riot’s total holdings in Bitfarms to 85.3 million shares, representing an 18.9% ownership stake.

Context of the Acquisition

This recent transaction highlights the ongoing competitive atmosphere in the cryptocurrency mining industry. Riot had previously made headlines in May by presenting an unsolicited $950 million acquisition proposal for Bitfarms, which was promptly rejected by Bitfarms, who felt the valuation did not accurately reflect their worth.

In response to these takeover attempts, Bitfarms implemented a “poison pill” strategy to protect against potential hostile acquisitions. However, this strategy faced challenges from Canadian regulators.

Despite withdrawing its acquisition bid, Riot has persisted in applying pressure on Bitfarms’ management. Riot organized a special shareholder meeting aimed at replacing certain board members at Bitfarms with independent candidates.

Boardroom Changes at Bitfarms

The ongoing boardroom negotiations appear to have prompted changes at Bitfarms. On August 13, the company announced the departure of co-founder and chair Nicolas Bonta, who was one of the directors that Riot sought to replace.

Riot has expressed intentions to continue evaluating its investment in Bitfarms and may explore additional avenues for influencing the firm’s management structure.

Other Strategic Moves by Riot Platforms

In addition to its dealings with Bitfarms, Riot has been active in expanding its operations through acquisitions. On July 24, the company completed the acquisition of Block Mining, based in Kentucky, for $92.5 million. This purchase is expected to enhance Riot’s hashrate significantly and extend its operations into new energy markets beyond Texas.

The deal for Block Mining included an $18.5 million cash payment, alongside $74 million in Riot common stock, with a potential earn-out of up to $32.5 million available through 2025, depending on further power purchase agreements negotiated by Block Mining.

• Riot’s total holdings in Bitfarms now stand at 85.3 million shares.
• The strategic acquisition of Block Mining strengthens Riot’s operational capacity.
• Riot continues to challenge and influence Bitfarms’ board management.