Bitfarms Ltd. and Riot Platforms Inc. have recently signed a settlement agreement ending the earlier corporate conflict. This follows Riot Platforms buying a 9.25% stake in Bitfarm, making the company its largest shareholder.
As provided for in the new agreement, Bitfarms co-founder, Andrés Finkielsztain, resigned from the board of directors. The settlement helps both companies free up resources to concentrate on their strategic objectives.
Riot Platforms had earlier offered $950 million to acquire Bitfarms, but the deal faced some opposition. However, the firms have now agreed to proceed, with Bitfarms agreeing to Riot’s proposal under certain circumstances, including a 15% equity stake in the new company.
Bitfarms Expands Board Following Riot Platforms Deal
There will be a leadership change as part of the settlement, with Finkielsztain’s resignation and new board members. As a result of the agreement, Amy Freedman of Ewing Morris will become a director at Bitfarms.
Also, Bitfarms plans to increase the size of the board from five directors to six through a special shareholder meeting. Riot Platforms has also agreed to retract its June requisition, demonstrating its support for the new approach.
This is likely to put both companies in a stable position after the past months of volatility. The reconstitution of the board is considered a move toward enhancing the governance and strategic fit of the two companies.
Focus Shifts Beyond Bitcoin Mining
After the settlement, Bitfarms plans to expand its operations beyond the Bitcoin mining segment. It wants to diversify its earnings sources, including energy production, energy sales, and waste heat recovery.
Bitfarms has also announced its intentions to expand its operations in high performance computing (HPC) and artificial intelligence (AI) technologies that will diversify its operations. Riot Platforms, a leading firm in the US Bitcoin mining market, remains on an expansion spree.
Its acquisition is consistent with its plan to become the world’s largest publicly traded Bitcoin miner. This agreement enables both companies to grow while each has a unique area of interest within the overall cryptocurrency market.
Stock Markets React Positively to the Deal
The stock markets had a bullish response to the agreement between Riot Platforms and Bitfarms. Bitfarms’ stock rose 2.21% and traded at around $2.78 in Monday’s early New York session.
Riot Platforms’ shares were also up 1.95 percent to trade at approximately $7.33 per share. Both companies have faced a great stock market decline this year with the mentioned gains.
Bitfarms’ market capitalization has been down by more than 29% for the year, and Riot Platforms’ stock has declined by over 50% since the start of the year. The settlement is a future opportunity to observe positive changes in both companies’ stock performance trends.
