As an analyst with over two decades of experience in the tech and crypto markets, I’ve witnessed numerous twists and turns that often defy expectations. The recent settlement between Riot Platforms Inc (NASDAQ: RIOT) and Bitfarms Ltd (NASDAQ: BITF) is one such event that, while surprising, offers a glimmer of hope in these challenging market conditions.
In the aftermath of some recent closed-door discussions, I’ve learned that Riot Platforms Inc (NASDAQ: RIOT), a leading Bitcoin (BTC) mining operation in the U.S., and Bitfarms Ltd (NASDAQ: BITF), a prominent crypto mining company based in Canada, have reached a settlement agreement. The two entities have shared that they’ve resolved an ongoing dispute, with Andrés Finkielsztain, one of Bitfarms’ co-founders, choosing to step down from the company’s board of directors.
Both parties warmly accepted the settlement, with Jason Les, Riot Platforms’ CEO, underlining that the backing of the revamped Bitfarms’ board members would continue to be robust.
Ben Gagnon, CEO of Bitfarms, expressed his satisfaction with the deal struck with Riot and emphasized their eagerness to put all their efforts into implementing their growth plan. He continues to keep the company’s sights set on expanding the business beyond Bitcoin mining, exploring captivating and complementary sectors such as energy production, energy trading, heat recovery, and other lucrative revenue sources like High-Performance Computing (HPC) and Artificial Intelligence.
Details of the Settlement Agreement Between Riot Platforms and Bitfarms
In accordance with the fresh agreement, not only will Finkielsztain relinquish his position on the board, but Bitfarms has also brought in Amy Freedman, an experienced professional who serves as an advisor to Ewing Morris, into the team.
Significantly, Riot Platforms has decided to rescind its request made in June. In the near future, Bitfarms’ shareholders will be invited to vote on increasing the number of board members from 5 to 6 at a forthcoming special gathering.
Primarily, Bitfarms has consented to Riot’s acquisition, contingent upon them retaining a minimum of 15% ownership in the resulting entity.
What Happened?
Back in May of this year, I learned that Riot Platforms declared their intent to purchase Bitfarms at a price of $2.3 per share. Their goal was to establish themselves as the world’s foremost publicly traded Bitcoin mining company. Already holding a 9.25% stake in Bitfarms, they planned to acquire the remaining shares for approximately $950 million.
Initially, Riot Platforms planned to give Bitfarms’ shareholders just a 17% share in the bigger company, but this proposal didn’t sit well with certain investors.
Market Impact
After the agreement in the two corporations, there was an uptick in their stock market activity, displaying optimistic trends. However, it’s worth noting that throughout this year, both companies’ stocks have experienced losses, contrasting with the significant growth Bitcoin has shown during the same timeframe.
For example, Shares of itfarms rose approximately 2.25% in the previous 24 hours to a price of around $2.055 during early trading on Monday in New York. Despite this, the company with a market value of nearly $908 million has experienced a decline of over 29% in its value so far this year.
Conversely, Riot stocks rose approximately 2% on Monday, trading around $7.28 at the moment of this update. Despite being a corporation worth $2.18 billion, its share value in the stock market has dropped over 50% since the start of this year.
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2024-09-23 19:42