Riot Platforms Inc (NASDAQ:RIOT) shares have been volatile amid ongoing developments surrounding a potential takeover attempt of Bitfarms Ltd (NASDAQ:BITF). Shares are moving higher Wednesday after the Bitcoin (CRYPTO: BTC) mining company commented on the recent adoption of a shareholder rights plan.
What To Know: Bitfarms previously initiated a strategic alternatives review process to consider continuing to execute on the company's business plan, a business combination or other strategic transaction or a sale of the company following a takeover attempt from Riot.
The special committee determined that Riot's offer "significantly undervalued" the company. Riot then announced that it built a 12% stake in Bitfarms as it continued to pursue a potential takeover. Bitfarms followed up that move with the adoption of a shareholder rights plan.
Under terms of the shareholder rights plan, if Riot or another entity builds a stake of more than 15% in the company between June 20 and Sept. 10, Bitfarms will issue new shares, diluting the stake of Riot or other entity pursuing a hostile takeover.
Why It Matters: On Wednesday, Riot issued a press release commenting on the newly announced shareholder rights plan, which it called "shareholder unfriendly."
Riot argued that the 15% threshold is in direct conflict with established legal and governance standards and suggested the move is further evidence that the Bitfarms board is disregarding good corporate governance.
"We have attempted to privately engage with the Bitfarms Board and recently sent two letters urging constructive collaboration with us around the addition of at least two new directors who are fully independent of Bitfarms and Riot. Instead of engaging with us privately and in good faith, Bitfarms has responded by implementing an off-market Poison Pill with a trigger well below the customary 20% threshold," said Jason Les, CEO of Riot.
"We will continue to push to address the serious corporate governance issues at Bitfarms and ensure that shareholders have a say on the Company's path forward."
It's worth noting that former President Donald Trump has called for all remaining bitcoin to be mined in the United States, which may be helping lift mining stocks Wednesday.
Don't Miss: Donald Trump Wants 'All The Remaining Bitcoin To Be Made In The USA'
RIOT Price Action: Riot shares were up 0.96% at $9.90 at the time of publication, according to Benzinga Pro.
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