Riot Platforms Urges Bitfarms Shareholders to Elect New Directors at Upcoming Meeting

Riot
Platforms,
Inc.
(NASDAQ:
RIOT)
has
issued
an
open
letter
to
shareholders
of
Bitfarms
Ltd.
(NASDAQ/TSX:
BITF)
ahead
of
the
upcoming
special
meeting
scheduled
for
October
29.
Riot,
which
owns
approximately
19.9%
of
Bitfarms,
is
advocating
for
significant
changes
to
the
Bitfarms
Board
of
Directors
to
enhance
shareholder
value,
according
to

riotplatforms.com.

Call
for
Governance
Overhaul

In
its
letter,
Riot
emphasized
the
need
for
further
board
changes,
citing
the
resignation
of
two
Bitfarms
co-founders,
Emiliano
Grodzki
and
Nicolas
Bonta,
as
insufficient.
The
letter
criticized
the
Bitfarms
Board’s
recent
actions,
including
the
adoption
of
a
shareholder
rights
plan
and
the
acquisition
of
Stronghold
Digital
Mining,
Inc.
(NASDAQ:
SDIG),
as
reactive
and
inadequate.

Riot
pointed
out
that
the
Stronghold
acquisition,
valued
at
$175
million,
including
$50
million
in
assumed
debt,
represents
a
more
than
100%
premium
over
Stronghold’s
closing
share
price
prior
to
the
announcement.
Riot
questioned
the
timing
and
rationale
behind
this
transaction,
suggesting
it
was
another
move
to
entrench
the
current
board.

Proposed
Nominees
for
the
Board

Riot
has
announced
its
intention
to
nominate
two
independent
directors,
Amy
Freedman
and
John
Delaney,
for
election
at
the
special
meeting.
These
nominees,
according
to
Riot,
possess
the
necessary
experience
to
bring
much-needed
governance
oversight
and
transaction
expertise
to
the
Bitfarms
Board.

Riot’s
campaign
has
already
led
to
some
changes,
including
the
resignation
of
co-founders
Grodzki
and
Bonta.
However,
Riot
believes
that
further
independent
voices
are
needed
to
ensure
that
the
board’s
decisions
benefit
all
shareholders,
rather
than
just
a
select
few.

Criticism
of
Bitfarms’
Board
Actions

Riot’s
letter
detailed
several
concerns
about
the
current
Bitfarms
Board’s
actions,
including:

• 
  Failed
  Poison
  Pill:
  The
  adoption
  of
  a
  shareholder
  rights
  plan
  with
  a
  15%
  threshold,
  which
  was
  invalidated
  by
  the
  Ontario
  Capital
  Markets
  Tribunal.
• 
  Unilateral
  Board
  Appointments:
  The
  appointment
  of
  Fanny
  Philip
  to
  the
  board
  without
  consulting
  Riot.
• 
  Stronghold
  Acquisition:
  The
  acquisition’s
  timing
  and
  terms,
  which
  Riot
  argues,
  do
  not
  serve
  shareholders’
  best
  interests.
• 
  Lack
  of
  Engagement:
  The
  board’s
  continued
  reluctance
  to
  engage
  with
  Riot
  constructively.

Path
Forward

Riot
is
urging
Bitfarms
shareholders
to
vote
for
its
nominees
to
help
rectify
what
it
describes
as
broken
governance
at
Bitfarms.
Riot
also
warned
against
any
pre-meeting
actions
by
the
current
Bitfarms
Board
that
could
disadvantage
shareholders
or
dilute
their
equity.

The
special
meeting,
set
for
October
29,
will
be
a
pivotal
moment
for
Bitfarms’
future
governance.
Riot
remains
committed
to
its
campaign
and
looks
forward
to
presenting
its
case
to
shareholders.

Image
source:
Shutterstock