Ontario court bans Bitfarms miner from issuing new shares to existing owners

Initially, Riot offered to buy Bitfarms for $950 million, but after receiving a refusal, it began to actively increase its stake in the company by buying shares. By mid-June, Riot's stake in Bitfarms reached 14%.

In response, Bitfarms board members said that when Riot's stake exceeded 15%, they would issue additional shares at a discounted price to other existing shareholders, thus reducing the competitor's stake. This defensive tactic is called a “poison pill.”

Riot's management, in turn, went to court, which ordered Bitfarms to stop Bitfarms from acting on this tactic. Riot CEO Jason Les called the court's decision a victory for all Bitfarms shareholders, and said that the “poison pill” was “another example of poor corporate governance and Bitfarms‘ directors’ continued attempts to consolidate their position.”

Les also said that Riot intends to nominate three director candidates independent of both companies for election to Bitfarms' board of directors: John Delaney, Amy Friedman and Ralph Gehring. He believes these experts will be able to fix the corporate governance situation and “bring much-needed fresh ideas.”

Shares of Bitfarms are trading under the ticker BITF on the Nasdaq at $2.7, having added 4.5% overnight. Growth over the past six months has totaled 24%. The company ranks 11th in the world in terms of capitalization among mining companies with a value of $1.14 billion.