Riot Platforms has increased its stake in Bitfarms to 13.1%, sparking a takeover battle amidst leadership turmoil and market excitement.

Riot's Acquisition Approach

Riot Platforms, a prominent cryptocurrency mining company, has acquired a significant stake in Bitfarms through three separate transactions. The total value of these transactions is over $111 million, with Riot now holding approximately 13.1% of Bitfarms' shares. This move was revealed through a filing with the United States Securities and Exchange Commission on June 11.

Dispute Over Takeover Defense Measures

Riot Platforms has expressed concerns over Bitfarms' adoption of a shareholder rights plan, which aims to prevent Riot from increasing its ownership beyond 15%. Riot's CEO, Jason Les, believes this move deviates from established legal and governance standards. He notes that the usual threshold for such actions is 20%, suggesting that Bitfarms may have overreached themselves in their defense tactics.

Market Reaction and Leadership Changes

The takeover battle has created significant buzz on the stock market, with Bitfarms' stock price rising by over 56%. The background of this takeover battle is accompanied by drastic changes in Bitfarms' leadership. The company recently lost its CEO, Geoffrey Morphy, who resigned after the company was sued. Nicolas Bonta has since taken over as the interim president and CEO. Riot's CEO, Jason Les, has personally attacked Bonta, calling for his removal due to alleged "poor corporate governance."

Complications in Acquisition

This leadership conflict adds to the complexity of the acquisition story. Riot Platforms had previously offered a $950 million buyout of Bitfarms, a 24% premium over Bitfarms' average share price. This acquisition aligns with Riot's strategy of enhancing its market position in the competitive cryptocurrency mining sector.