Riot Platforms is pushing Bitfarms to sell, but Bitfarms is resisting Riot’s advances
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Bitcoin (BTC USD) miner Riot Platforms (NASDAQ:REVOLT) continues his efforts against the rival Bitfarms (NASDAQ:BITF), buy more stocks and to seek a shareholder meeting to appoint its own directors.
Bitfarms is based in Toronto rejected Riot’s $950 million takeover offer and is expanding its US activities to Pennsylvania.
Meanwhile, speculators drove BITF’s stock price to $3.03 per share overnight, pushing its market capitalization to $1.25 billion. RIOT stock should open at $11.05, giving it a market cap of $3.2 billion.
Servers at dawn
Shares of both Bitcoin miners have fallen sharply so far in 2024. Riot is down almost 29%. Bitfarms’ price had been almost halved before Riot began its acquisition. Compared to the previous year, it has now only fallen by 1%.
Bitfarms sent out a press release blaming its larger competitor Disruption to the strategic review process. The press release states that it remains “committed to maximizing value for all shareholders” and did not directly reject Riot’s advances.
However, Bitfarms has also adopted the so-called a “poison pill” This would result in Riot issuing new shares once Riot holds 15% of its common shares.
Both companies mine Bitcoin using server farms that calculate answers to Bitcoin’s cryptographic puzzle to earn virtual currencies. The price of Bitcoin has increased by 52% in 2024 and was trading at over $67,000 on June 14th.
Riot had revenue of $280 million last year, while Bitfarm had revenue of just under $200 million. But their value lies in their Bitcoin holdings. Riot owns 9,084 Bitcoins at a recent count, worth just over $608 million. Bitfarms then owns around 3,349 Bitcoin Selling half of his shares recently to reduce debt.
Bitfarms considers the Riot offer a “low-ball bid.”
BITF and RIOT Stock: What Happens Next?
Riot needs to increase its offering to have a chance of success. The company only had $688 million in cash at the end of March. Maybe it can sell some Bitcoin.
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At the time of publication, Dana Blankenhorn did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to those of InvestorPlace.com Publishing Guidelines.