Bitfarms Stock Soars 15% after New Mining Site Announcement

UTC by Chimamanda U. Martha · 3 min read
Bitfarms Stock Soars 15% after New Mining Site Announcement
Photo: Depositphotos

Bitfarms plans to leverage its farm design expertise and operational excellence to make the new facility one of its best locations, well-optimized for growth.

Bitfarms Ltd (TSE: BITF), a prominent crypto mining company focused on Bitcoin (BTC), experienced a significant boost in its stock price, with shares rising over 15% after the market closed on June 13.

This sharp increase followed Bitfarms’ announcement that it has secured an agreement to construct a new mining facility in Sharon, Pennsylvania. The new site will have a power capacity of 120 megawatts and is located within the Pennsylvania-New Jersey-Maryland Interconnection (PJM), the largest wholesale electricity market in the United States.

The company’s shares responded positively to the news, reflecting investor confidence in the expanded mining capabilities. As of now, BITF is trading around $2.70.

Expanding Mining Capacity

The Canada-based firm plans to leverage its farm design expertise and operational excellence to make the new facility one of its best locations, well-optimized for growth.

Once completed, the new site will significantly increase the company’s mining capacity, strengthening its position in the competitive crypto mining market.

According to the firm, the development of the mining site marks Bitfarms’ official debut in a “largely de-regulated and curtailment-friendly US power market”.

This expansion will boost the company’s projected power capacity to 648 MW by 2025, marking a 170% increase from its current capacity and a 47% increase from its target for the end of 2024.

Additionally, the company’s chairman and interim CEO, Nicolas Bonta, stated that the facility will support up to 8 EH/s (exahashes per second).

“Our new site will support up to 8 EH/s, and coupled with our recent acquisition of an additional 100 MW in Paraguay, we are projecting over 35 EH/s by 2025. As we continue to explore additional opportunities, we will update our targets accordingly,” he said.

He further noted that Bitfarms plans to pursue “strategic ventures” that would bring substantial value to both the company and its shareholders.

Navigating Financial Challenges

The company has faced difficulties delivering value to shareholders since 2022 following a market crash that affected many companies in the sector. In March 2023, Bitfarms announced it was examining acquisition prospects, which led to companies like Riot Blockchain expressing interest in a buyout.

However, Bitfarms rejected Riot’s offer of $950 million, or $2.30 per share, stating it undervalued the company’s market worth.

Riot attempted a hostile takeover by acquiring Bitfarms’ shares and calling for a shareholder meeting to discuss the proposal.

In response, Bitfarms employed the “poison pill” strategy to protect itself against a possible takeover. This tactic is used to make a company less desirable or dilute an acquirer’s ownership of the target.

Despite these efforts, Riot has not backed down. On Thursday, the company purchased an additional 1,432,063 BITF shares, worth approximately $3.87 million at $2.70 per share. As of June 13, Riot owns 57.62 million BITF shares, representing a 14% stake.

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