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Bitfarms Expands to Pennsylvania as Riot Platforms Increases Ownership Stake to 14%

Hassan Shittu
Last updated: | 3 min read
Bitfarms Expands to Pennsylvania as Riot Platforms Increases Ownership Stake to 14%

Bitfarms Ltd., a leading crypto mining company specializing in Bitcoin (BTC), has announced plans to expand its operations to Sharon, Pennsylvania, and secured a significant agreement to develop a new mining facility. This strategic move comes as Riot Platforms increases its ownership stake in Bitfarms to 14%.

Notably, these developments have significantly boosted Bitfarms’ stock price by more than 16% in the last 24 hours, reflecting investor confidence in the company’s growth and expansion strategies.

Bitfarms’ Stock Rose After Expansion to Pennsylvania Announcement

On June 13, Bitfarms Ltd. revealed its agreement to construct a new mining facility in Sharon, Pennsylvania. The new site will have a power capacity of 120 megawatts and is strategically located within the Pennsylvania-New Jersey-Maryland Interconnection (PJM), the largest wholesale electricity market in the United States.

This expansion will enhance Bitfarms’ mining capacity and operational efficiency, further solidifying its position in the competitive crypto-mining market. Nicolas Bonta, Bitfarms’ chairman and interim CEO, emphasized the strategic importance of the expansion, noting that it strengthens the company’s position in the industry and enhances geographical diversification. Bonta said,

“Executing on our strategy to cost-effectively expand our operating footprint in the U.S., we have entered into an agreement for flexible power trading within the PJM. Leveraging our operational excellence and farm design expertise, we’re poised to optimize this site, facilitating efficient growth.”

The announcement led to a notable increase in Bitfarms’ stock price, with shares rising over 16% after the market closed. The stock is currently trading around $4.01.

Bitfarms plans to leverage its farm design expertise and operational excellence to make the new facility one of its best locations, optimized for growth. Once completed, the site will significantly increase the company’s mining capacity, boosting its projected power capacity to 648 MW by 2025. This marks a 170% increase from its current capacity and a 47% increase from its target for the end of 2024.

The new site will support up to 8 EH/s (exahashes per second), contributing to Bitfarms’ projection of over 35 EH/s by 2025. Bonta further added,

“As additional opportunities in our pipeline come to fruition, we will update both our contracted power capacity and our 2025 EH/s target. We remain committed to pursuing similar strategic ventures to deliver significant value to our shareholders.”

Riot Platforms Increases Stake in Bitfarms to 14% and Calls for Board Changes

Despite recent financial challenges, Bitfarms is committed to delivering value to its shareholders. The company faced difficulties following a market crash in 2022 and rejected a $950 million buyout offer from Riot Platforms, which it deemed undervalued the company’s worth.

On June 13, Riot Platforms announced an increase in its ownership stake in Bitfarms, now holding approximately 14% of the company’s issued and outstanding shares. The additional acquisition of 1,432,063 common shares represents about 0.35% of Bitfarms’ total shares, bringing Riot’s total to 57,627,036 shares.

According to the announcement, Riot intends to requisition a special meeting of Bitfarms’ shareholders. At this meeting, Riot plans to nominate several new directors to join Bitfarms’ board of directors. Riot said,

“Riot currently intends to requisition a special meeting of the Company’s shareholders, at which Riot intends to nominate several well-qualified and independent directors to join the Company’s board of directors (the “Board“), which follows from Riot’s serious concerns regarding the Board’s track record of poor corporate governance.”

In its announcement, Riot stated that it will continue to review its investment in Bitfarms. Depending on various factors, such as discussions with Bitfarms’ board and advisors regarding Riot’s previously submitted non-binding proposal, the company’s financial position, strategic direction, market conditions, and other investment opportunities, Riot will take action on its investments.

Riot’s ongoing review and potential actions underscore its active engagement and strategic interest in the future governance and direction of Bitfarms.

Notably, Riot reported a net income of $211.8 million for Q1 2024, a 1,000% increase from the previous year. This surge was driven by a 131% rise in Bitcoin prices, boosting mining revenue by 55.4% to $74.6 million.