Bitcoin Miner Bitfarms Shares Rally Amid Riot Takeover Turning Hostile
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Bitcoin mining firm Bitfarms saw its shares rally as news of pursuing Pennsylvania emerged to counter Riot Platforms Inc’s influence and hostile takeover. 

The shares of the Toronto-headquartered Bitcoin miner surged 17% on Thursday June 13 as the firm disclosed plans to expand its presence in Pennsylvania, a move perceived as an attempt by Riot to defend its plans for a hostile takeover. 

This expansion is crucial for Bitfarms as it not only strengthens its operations but also serves as a strategic countermeasure against Riot’s aggressive tactics. 

Bitfarms Expanding in Pennsylvania 

The Bitcoin miner revealed an agreement to facilitate the development of the initial large-scale mining facility within the US. 

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This facility, once operational, will significantly boost Bitfarms’ mining capacity and further its expansion plans. 

The site’s development will scale Bitfarms’ power capacity to 648MW by next year. Construction begins immediately, and 120 megawatts (MW) will be added.

Bitfarms disclosed plans to lease the site located in Sharron, Pennsylvania. 

The facility will host computers that continually solve complex calculations to verify Bitcoin transactions.

With the facility set to be a power-intensive initiative, Bitfarms hailed the location, citing its competitive electricity supply.

Pennsylvania Facility Key to Financial Stability and Expansion Plans

Bitfarms interim chief Nicolas Bonta expressed optimism about the location within the Pennsylvania-New Jersey-Maryland Interconnection. The executive highlighted that the facility’s access to the country’s leading wholesale electricity market and the completion of the site will significantly enhance the firm’s geographical diversification, fostering a sense of optimism among our audience about Bitfarms’ future.

Bitfarms clarified that the 11,200-square-foot warehouse’s access is funded by issuing 1.5 million common stock. This decision was made to ensure the company’s financial stability and support its expansion plans, demonstrating Bitfarms’ commitment to its strategic goals. 

The Nasdaq-listed Bitcoin miner, under the ticker symbol (BITF), has seen its share price surge by 145% in the past 12 months. The daily rally of  2% saw the stock exchange hands at $2.87 on Friday June 14.

Meanwhile, Bitfarms attempts to resist Riot Platforms, which earlier this month indicated that it had amassed 12% of the Toronto-based crypto miner’s total shares.  

Riot Platforms alleges Bitfarms directors of exercising poor corporate governance, specifically citing instances of mismanagement and lack of transparency. Riot revealed it plans to call a shareholders’ meeting to nominate better-qualified and independent candidates to the board, aiming to address these governance issues.

Bitfarms expressed acrimony to the proposal, terming it undervaluing the Bitcoin miner. Besides, it barely harbors the best shareholders’ interests.

Riot Platforms Hostile Takeover

Bitfarms reiterated its commitment to its shareholders, emphasizing that a specially convened committee comprising independent directors reached a conclusion against Riot Platforms. This reiteration of Bitfarms’ commitment to its shareholders is aimed at reassuring our audience about the company’s governance.

Lodging the attack against Bitfarms’ governance was both hypocritical and a thinly veiled ploy to realize Riot’s selfish agenda to acquire the Bitcoin miner at a discounted price. The directors considered Riot not acting in good faith.

Riot responded by accusing Bitfarms of languishing under poor governance, evident in the poison pill. The approach precludes Riot from owning a 15% stake in the common shares without tabling a formalized take-over bid to acquire the entire Toronto-based miner.

A ‘poison pill’ is a typical defensive tactic deployed within the business world to make shares unattractive to buy and discourage potential acquirers. 

In the case of Bitfarms, it has implemented a poison pill strategy that precludes Riot from owning a 15% stake in the common shares without tabling a formalized take-over bid to acquire the entire Toronto-based miner. 

Riot chief executive Jason Les rebuked Bitfarms for failing to engage the potential acquirers privately and instead using an off-market poison pill.

Les assured that Riot will continue the pursuit of addressing the apparent corporate governance challenges that Bitfarms confronts.  

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Michael Scott

By Michael Scott

Michael Scott is a skilled and seasoned news writer with a talent for crafting compelling stories. He is known for his attention to detail, clarity of expression, and ability to engage his readers with his writing.

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