Bitfarms shares jumped 16% after Riot Platforms announced 14% ownership rate

Riot Platforms (NASDAQ: RIOT) announced Thursday that it has acquired 1,432,063 shares of Bitfarms (BITF) at a price of approximately $2.70 per share, for a total of approximately $3.87 million.

This acquisition brings Riot’s total Bitfarms holdings to 57.62 million, which is approximately 14% of the company’s total shares.

Following the announcement, Bitfarms’ stock price rose 16% in Toronto the following Friday.

This action is part of Riot’s ongoing efforts to acquire Bitfarms against the company’s wishes.

Previously, Bitcoin mining company Riot offered to acquire Bitfarms for an estimated $950 million. In response, Bitfarms has taken steps to protect itself from being acquired against its will.

Riot’s Chief Executive Jason Les stated that he did not approve of Bitfarms’ defensive tactics.

“Instead of meeting with us privately and candidly, Bitfarms chose to use a defensive strategy not widely available in the market, with the trigger point significantly lower than the usual 20%,” Les said.

Earlier in the week, Bitfarms implemented a defensive strategy known as a “poison pill” in an attempt to make itself less attractive to potential buyers. This strategy involves the company issuing new shares, making it more difficult for an acquirer to gain control.

According to Reuters, Bitfarms’ defense plan allows the release of new shares if any entity purchases more than 15% of Bitfarms shares between June 20 and September 10. This will dilute the purchasing entity’s ownership percentage. After September 10, this limit will increase to 20% under certain conditions regarding acquisition attempts.

Riot Platforms plans to call a special meeting of Bitfarms shareholders to propose the election of several independent directors to Bitfarms’ board of directors.

On Friday, Bitfarms announced its actual expansion into the United States, opening a new facility in Sharon, Pennsylvania. As stated in its announcement, the company aims to create up to 120 megawatts (MW) of electric power capacity in this new facility.

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