Bitfarms Bolsters Board Amid Hostile Takeover Threat from Riot Platforms

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Bitfarms made a strategic decision to strengthen its defenses against Riot Platforms’ “hostile takeover” approach. On June 27, Bitfarms announced the appointment of Fanny Philip as an independent board member, in an effort to protect its autonomy and fight Riot’s aggressive moves.

The Riot Platforms and Bitfarms Battle

The drama began on June 24 when Riot Platforms, which owns a 14.9% share in Bitfarms, announced its desire to replace three board members with independent directors. Riot’s attempt to increase its ownership above the 15% level was vetoed by current board members, prompting this aggressive step. Riot’s initial plan to acquire all of Bitfarms’ common shares at $2.30 per share was abandoned, with Riot claiming, “[It] is clear that engaging with the incumbent Bitfarms Board on a potential combination is just not possible.”

Bitfarms Quickly Appointed Philip

In response, Bitfarms quickly appointed Philip, who brings extensive experience to the table. She is president of the Canadian Blockchain Consortium’s Québec Chapter and a member of the mining committee. With Philip’s appointment, four of Bitfarms’ five board members are now independent, in sharp contrast to Riot’s intention to install three wholly independent directors: John Delaney, Amy Freedman, and Ralph Goehring.

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This boardroom drama takes place against the backdrop of rising interest in artificial intelligence (AI) and Bitcoin’s expanding usage, which has resulted in massive investment in Bitcoin mining operations. Investors are making large bets on Bitcoin miners, anticipating an increase in demand for processing power.

Competition Gains Advantage

On June 24, bitcoin miner Hut 8 received a $150 million investment from Coatue Management, which is owned by billionaire Philippe Laffont. Laffont voiced confidence in Hut 8’s future, claiming that the company is “well-positioned” to expand its processing capacity and capitalize on emerging prospects in the AI and cryptocurrency industries.

“We are committed to supporting innovators advancing AI and believe that compute capacity is crucial to unlocking significant growth across the ecosystem,” according to Laffont. The acquisition is scheduled to be completed by July 11, after Hut 8 filed the investment agreement with the US Securities and Exchange Commission on June 21.

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Hut 8 stands out as one of the greatest public mining firms in terms of processing capacity, with a market capitalization of $1.1 billion. This significant investment demonstrates the growing strategic importance of computational power in AI and cryptocurrency mining.

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