Riot Platforms has invested $111 million to acquire a 13.1% stake in Bitfarms, sparking a corporate governance battle and the implementation of a "poison pill" defense by Bitfarms' board.
Bitcoin miner Riot Platforms has recently invested $111 million to acquire a 13.1% stake in the Canadian bitcoin miner Bitfarms. The investment, which began in late March, has seen Riot Platforms steadily increase its shares in Bitfarms through the open market, culminating in a sizeable stake as of June 11.
Riot's aggressive strategy has not gone unnoticed, as Bitfarms responded with the implementation of a shareholder rights plan, commonly referred to as a "poison pill," on June 10. This defensive measure is intended to thwart potential takeovers by diluting the shares of any investor that surpasses a 15% ownership threshold without a formal bid for all outstanding shares.
Riot Platforms CEO Jason Les criticized Bitfarms' Board for its actions and governance, demanding the removal of Bitfarms' chairman and interim CEO, Nicolas Bonta. "The action demonstrates the Bitfarms Board’s entrenchment and disregard for the perspectives of its shareholders," Les stated in a statement. Les had previously urged the Bitfarms Board to consider the resignation of Bonta, attributing poor corporate governance practices to his leadership.
In a further statement, Riot commented on the adoption of the poison pill, which it deems "shareholder-unfriendly" and below the customary 20% threshold. The statement also mentioned the recent voting out of Bitfarms co-founder Emiliano Grodzki by shareholders, indicating a possible rift between the company's management and its investors.
Riot continues to push for corporate governance reforms at Bitfarms and seeks greater involvement in the company's decision-making process, advocating for the addition of at least two new directors who are independent of both Bitfarms and Riot.
