Riot acquires 13% stake in BitFarms as CEO rejects ‘poison pill’ strategy

Jason Les, the CEO of the cryptocurrency mining company Riot Platforms, opposes the Bitfarms plan so that the company does not get more than 15% stake in the corporate raid.

In a June 11 filing with the United States Securities and Exchange Commission, Riot disclosed that it purchased approximately six million shares of BitFarms common stock in three separate transactions. The shares – valued at more than $111 million at the time of purchase – and Riot's previous acquisitions included the company's 13.1% stake in Bitfarms.

BitFarms announced a shareholder rights plan on June 10 that suggests a “poison pill” strategy to fend off a Riot invasion. The plan seeks to prevent Riot from acquiring a stake of 15% or more in Bitfarms, undermining the company's initial plans to take control by diluting its share price.

In a statement on June 12, Les said Bitfarms' plan to lower it to 15% instead of the “usual 20%” is “in direct conflict with established legal and regulatory standards.” According to BitFarms, the shareholder plan allows Riot to proceed with its plan to take control “in accordance with applicable Canadian securities laws.”

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US-based Riot offered to buy the Canadian mining company for $950 million in May. This price represents a 24% premium over Bitfarms' one-month weighted average share price. BitFarms' Nasdaq stock price has risen more than 56 percent in the past 30 days.

In May, Bitfarms announced that former CEO Jeffrey Murphy would step down after filing a lawsuit against the mining company. Nicholas Bonta has been serving as interim president and CEO until the company decides on a replacement for Morphine. Les Bonta asked the board to remove him saying that he is “directly responsible”. [Bitfarms’] Poor Corporate Governance Practices”.

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