Riot Platforms becomes the largest shareholder of Bitfarms with 18.9% of the shares

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Riot Platforms has acquired an additional 1 million shares of rival Bitcoin miner Bitfarms, increasing its ownership to 18.9% of the outstanding shares. The move advances Riot’s bid to take over Bitfarms amid leadership changes and upcoming shareholder votes.

Riot Platforms now owns over 85.29 million shares of Bitfarms, cementing its position as the company’s largest shareholder. This latest purchase, valued at approximately $2.28 million, comes just a day after Bitfarms co-founder and former chairman Nicolas Bonta resigned from the board.

The leadership shakeup continues as Riot nominated three independent directors to the Bitfarms board in July to replace Bonta and others. Bitfarms has scheduled a special meeting of shareholders for October 29 to vote on the reconstitution of its board of directors, following Riot Platforms’ request for the June 24 meeting.

Financial challenges, rivalry

Both companies have faced financial challenges in recent quarters. Bitfarms reported a net loss of $27 million in its latest financial results, while Riot reported a net loss of $84.4 million in the second quarter, compared with a loss of $27.4 million in the same period last year. Despite these setbacks, both miners saw increases in bitcoin production during July, with Riot and Bitfarms reporting increases of 45% and 34% respectively.

The takeover bid highlights the trend of consolidation in the competitive crypto mining sector. As larger players like Riot seek to expand their influence, smaller operations may face pressure to merge or be acquired. This change could lead to a more concentrated and efficient mining landscape, although it may raise concerns about centralization in the industry. Recently, examples of such M&A activity in the crypto industry were reviewed by Crypto Briefing, covering Bakkt’s restructuring strategies.

Riot Platforms’ increased stake in Bitfarms to 18.9% signals its intention to strengthen its grip on the bitcoin mining sector amid ongoing leadership changes and financial challenges for both companies.

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