CASTLE ROCK, Colo. - Riot Platforms, Inc. (NASDAQ:RIOT), a Bitcoin mining and digital infrastructure company, has publicly criticized the shareholder rights plan adopted by Bitfarms Ltd. (NASDAQ/TSX: BITF). The plan, known as a "Poison Pill," was enacted without consulting major shareholders and sets a 15% threshold for share acquisition, below the common 20% standard.
Riot's CEO, Jason Les, expressed disappointment over Bitfarms' decision to implement the Poison Pill, highlighting it as a sign of the company's disregard for shareholder engagement and corporate governance. Riot had previously sought to work with Bitfarms on the appointment of two new independent directors and called for the resignation of Bitfarms' Chairman Nicolas Bonta, citing the need for improved corporate governance.
The Poison Pill was activated shortly after Bitfarms' shareholders demonstrated their dissatisfaction by voting out co-founder Emiliano Grodzki. Riot Platforms, which also has operations in Denver, Colorado, has emphasized its intention to continue advocating for governance reforms at Bitfarms.
This dispute arises amid Riot's non-binding proposal for a business combination with Bitfarms, which is not guaranteed to result in a definitive offer or transaction. Riot has advised shareholders and those considering trading in securities of both companies that the proposal does not constitute an offer and that there is no certainty of any agreement being reached.
The information provided is based on a press release statement.
In other recent news, Bitfarms Ltd., a cryptocurrency mining company, has been the subject of significant developments. Cantor Fitzgerald assumed coverage of Bitfarms with an Overweight rating and a new share target of $5.00, citing an inflection point in the company's operations. The firm anticipates a substantial increase in mining capacity by the end of the year, with the delivery of approximately 88,000 T21 mining rigs.
Riot Platforms has increased its stake in Bitfarms to around 12.00%, signaling potential influence over the company's corporate decisions. This move follows the acquisition of additional shares and intentions to nominate new board members.
Meanwhile, a series of analyst ratings have been released. H.C. Wainwright initiated coverage with a Buy rating, while Stifel Canada downgraded Bitfarms stock from Speculative Buy to Hold due to tensions surrounding Riot Platforms' attempted acquisition.
Bitfarms has also made significant operational advancements, securing an additional 100 megawatts of sustainable hydropower in Paraguay, potentially adding 6 exahash per second to its capacity in 2025. The company's first quarter 2024 financial results outlined growth objectives and operational enhancements, with a 9% revenue increase from the previous quarter, reaching $50 million.
These are some of the recent developments affecting Bitfarms.
InvestingPro Insights
In the wake of the corporate governance dispute between Riot Platforms, Inc. and Bitfarms Ltd., investors may find it crucial to examine the financial health and market performance of Bitfarms. According to InvestingPro data, Bitfarms holds a market capitalization of approximately $898.31 million USD. Despite challenging market conditions, the company has achieved a notable revenue growth of 26.09% over the last twelve months as of Q1 2024, with an even more impressive quarterly revenue growth of 67.44% in Q1 2024. This suggests a robust sales trajectory amidst the operational and governance challenges faced.
However, Bitfarms' financials also reflect areas of concern. The company’s gross profit margin stands at -3.2%, indicating struggles to maintain profitability in its operations. Additionally, the stock has experienced significant volatility, with a one-week price total return showing a decline of 9.56%, yet a strong rebound over the last month with a return of 31.21%. This volatility is echoed in the InvestingPro Tips, which highlight the stock’s recent hit and its inherent price fluctuations.
InvestingPro Tips further reveal that analysts do not expect Bitfarms to be profitable this year, which aligns with the company's negative P/E ratio of -6.14, adjusted to -10.0 for the last twelve months as of Q1 2024. This metric can be particularly relevant to investors considering the company's future earnings potential in relation to its current share price. Moreover, Bitfarms does not pay a dividend, which may influence investment decisions for those seeking regular income streams from their holdings.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available that delve into Bitfarms' cash position, sales growth expectations, and liquidity. These insights can be accessed through the InvestingPro platform, which offers a comprehensive suite of tools for informed investment decisions. By using the coupon code PRONEWS24, users can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a wealth of financial data and expert analysis.
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