Challenging Times for Bitfarms: Riot Platforms Urges Governance Reforms
Riot Platforms, Inc., the largest shareholder of Bitfarms Ltd., is shaking the crypto world with its latest move. An open letter issued by Riot today calls out Bitfarms for what it describes as defensive tactics leading up to a pivotal shareholder meeting set for October 29.
In the open letter, Riot, which holds approximately 19.9% of Bitfarms, criticizes recent board actions, such as board changes and the proposed acquisition of Stronghold Digital Mining, Inc. These measures, according to Riot, fall short and are reactive, prompting the call for further board changes to enhance shareholder value.
Riot’s Call for Governance Reforms, Criticized Bitfarm’s Recent Financial and Executive Decisions
Since Riot initiated its campaign, Bitfarms has already seen significant changes, including the resignation of two of Bitfarms’ co-founders and the appointment of new board members. However, Riot argues that these changes are mere reactions to its pressure and do not address the underlying governance issues at Bitfarms.
Specific grievances outlined by Riot include Bitfarms’ failed attempt to implement a shareholder rights plan known as the “Poison Pill” and the unilateral appointment of a new board member without consulting Riot. Furthermore, Riot raised concerns over Bitfarms’ acquisition of Stronghold Digital Mining, questioning the timing and valuation of the deal.
Riot Proposed change of Directors
Looking ahead, Riot is proposing the election of two independent nominees to replace current Bitfarms directors, aiming to bring critical expertise in corporate governance and public company board experience. Riot is cautious about potential financing transactions by Bitfarms before the shareholder meeting, emphasizing the need for transparency and shareholder engagement.
Riot’s message is clear: Bitfarms needs to pivot away from defensive tactics and prioritize shareholder interests. With Bitfarms reporting increased bitcoin production and hash rate expansion plans, the stakes are high as shareholders await the outcome of the upcoming special meeting.
