Bitcoin

Bitfarms Founders’ Shareholder Commitment Raises Concerns in Crypto Community

Riot Platforms, a Colorado-based company, has made a bid of $950 million to acquire its competitor Bitfarms. This acquisition proposal involves purchasing all Bitfarms shares at a price of $2.3 per share. If successful, this move could potentially position Riot Platforms as the world’s largest publicly listed Bitcoin miner.

On May 28, detailed information about the acquisition proposal was shared, revealing a mix of cash and common stock as part of the deal. Bitfarms shareholders could potentially own up to 17% of the merged entity. Initially proposed in late April, Bitfarms’ board initially rejected the offer, choosing not to enter into in-depth discussions with Riot.

However, complications arose after Bitfarms’ former CEO, Geoffrey Morphy, was fired and subsequently sued the company in the Superior Court of Ontario. This legal dispute, highlighting breach of contract and wrongful dismissal, has raised questions about the Bitfarms board’s actions, with Riot Platforms questioning their loyalty to shareholders’ best interests.

In response to the rejection, Riot Platforms plans to hold a special meeting with Bitfarms’ shareholders after May 31 to appoint new independent directors to the board. Upon the acquisition announcement, Riot Platforms acquired a 10% stake in Bitfarms, resulting in a nearly 10% increase in Bitfarms’ stock price, reaching $2.21 according to Google Finance.

If the acquisition goes through, it could significantly impact the competitive landscape of Bitcoin mining, establishing a new industry leader. Riot Platforms remains committed to pursuing this merger, highlighting its dedication to expanding and consolidating within the industry.

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