Riot Platforms Inc. (NASDAQ: RIOT), in a recent press release, announced that on Aug. 13, 2024, it purchased 1,000,000 shares of Bitfarms. This means it is now the owner of 18.9% (85,293,054 common shares) of Bitfarms’ common shares, up from 18.68% (84,293,054 common shares). The acquisition was made through the NASDAQ Stock Market, with Riot acquiring the shares at an average price of $2.28 per share, amounting to a total investment of $2,280,800.
Following this purchase, Riot Platforms currently owns more than 85.29 million shares of the mining company, becoming its largest shareholder. The news comes only one day after Nicolas Bonta, Bitfarms’ former chairman and cofounder, stepped down as one of the three board directors.
Furthermore, the timing of this purchase comes after Riot announced in early June that it had requested a special meeting of Bitfarms’ shareholders. During this meeting, the company declared that it planned to remove certain directors and replace them with fresh, independent leaders, a move that could change the direction of the company. The move also suggests that the Bitcoin mining company does not want to be just a passive investor; instead, it wants to be more involved in the company’s strategic direction. Following this June meeting, Bitfarms has called for an additional shareholder meeting on Oct. 29, 2024, to decide on reforming its board.
Now, with an 18.9% stake in Bitfarms, Riot is showing the whole world that it is seriously focused on the company’s future. Whether that means having more influence on business decisions or just keeping an eye on things, investors, stakeholders and other interested parties can see that Riot has the right plans.
Riot and Bitfarms have faced significant financial hurdles in recent times. In the latest financial reporting, Bitfarms had a $27 million net loss, while Riot saw a $84.4 million net loss in quarter 2 of this year. This is unlike the $27.4 million loss during the same period in 2023. However, despite these difficulties, both companies experienced an increase in the production of Bitcoin in July, with Bitfarms and Riot reporting 34% and 45% rises, respectively.
Looking ahead, Riot has assured its investors that it will continuously evaluate its stake at Bitfarms by taking into account things such as discussions with Bitfarms’ board and advisors, the financial health of the company and broader market conditions. Then, depending on these conditions, it will decide to either increase or decrease its holdings in Bitfarms or engage in other transactions that could affect its overall exposure to the company’s shares.
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