Colorado-headquartered crypto mining firm Riot Platforms has acquired possession of a 12% stake in rival Bitfarms regardless of shorting strain from Kerrisdale Capital.

Bitcoin mining firm Riot Platforms mentioned in a press release on Jun. 5 it acquired 1,460,278 widespread shares of Bitfarms, changing into the useful proprietor of roughly 12%. The corporate mentioned the most recent buy, at $2.45 per share, value Riot over $3.5 million in complete.

Following the acquisition, Riot acknowledged its intention to name a particular assembly of Bitfarms’ shareholders. At this assembly, Riot plans to appoint “several well-qualified and independent directors” to the Bitfarms board, citing “serious concerns regarding the board’s track record of poor corporate governance.”

This transfer comes amid shorting strain from Kerrisdale Capital, which lately disclosed a brief place in Riot, citing points with Riot’s gear sourced from China and operational issues, and inflicting Riot’s shares to drop by as a lot as 9% to $8.84. Nonetheless, Riot’s share price rebounded to $9.65 following the announcement of its further Bitfarms share buy, in accordance with Google Finance knowledge.

In late Could, Riot introduced a $950 million acquisition bid for Bitfarms, alleging that Bitfarms’ founders weren’t appearing in the most effective pursuits of all shareholders. Riot claims its proposal, initially submitted privately in late April, was rejected by the Bitfarms board with out substantive engagement.

Bitfarms responded by stating that Riot’s supply “significantly undervalues” its progress prospects. The corporate added {that a} particular committee had requested “customary confidentiality and non-solicitation protections” to which Riot didn’t reply.