The cryptoverse is riding high with buoyant cryptocurrency prices and a wave of regulatory embrace of crypto-based ETFs. This optimism has prompted crypto miner Riot Platforms (NASDAQ:RIOT) to launch a hostile bid for fellow miner Bitfarms (NASDAQ:BITF).
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The Hostile Bid
Riot has proposed to acquire Bitfarms at $2.30 per share. BITF last traded at $2.24 per share following a nearly 84% jump in its share price over the past year. Importantly, Riot also revealed a nearly 9.25% stake in BITF, making it the largest shareholder in the company.
Riot sees a combination with Bitfarms as a compelling opportunity with substantial upside for the combined entity. It also plans to call for a special meeting of BITF’s investors to add new independent directors to the latter’s board. Notably, Riot’s proposal denotes a total equity value of $950 million for BITF, whose market capitalization stands at around $633.7 million at present. If the deal materializes, current shareholders in BITF will own around 17% of the combined entity.
And BITF’s Rebuff
Interestingly, Riot approached BITF’s board for a combination last month. However, BITF’s board rejected the offer. The proposal also comes amid a leadership shakeup at BITF, which recently terminated its CEO. Importantly, a combination between the two companies would create the largest Bitcoin (BTC-USD) mining entity globally, with nearly 52 EH/s of self-mining capacity by the end of this year.
What Is the Price Prediction for Bitfarms Stock?
Meanwhile, Wall Street sees even higher upside potential in Bitfarms. The Street has a Strong Buy consensus rating on the stock, alongside an average BITF price target of $4.15. This points to a potential upside of 87.8% in the company’s share price.
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