Marathon Digital Holdings is set to launch a $250 million private offering of convertible senior notes, underscoring its strategy to boost its Bitcoin reserves.
In a press release on Aug. 12, the Florida-based firm announced that the proceeds would be allocated toward acquiring additional Bitcoin. To increase its Bitcoin reserves, the mining business intends to get the funds by a private issuance of convertible senior notes due in 2031.
The qualified institutional buyers will be presented with convertible notes under Rule 144A of the Securities Act 1933. These notes are Marathon Digital’s senior obligations, which are unsecured and include semi-annual interest payments. The company would also allow the first buyers to buy further notes for $37.5 million.
MARA intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes, which may include working capital, strategic acquisitions, expansion of existing assets, and repayment of debt and other outstanding obligations. The notes will be offered and sold to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act.
Marathon Digital Stock Drops 3.11% Amid Bitcoin Expansion Plans
The pre-market trading of Marathon Digital dropped 3.11% following the disclosure. Marathon Digital Holdings has revealed a notable development: It acquired $100 million in Bitcoin in late July, bringing its overall possession to around 20,000 BTC.
Target hash rate of 50 EH/s. This action is part of Marathon’s plan to double its Bitcoin mining capability by the end of 2024. Currently running Marathon, their hash rate of 24.7 EH/s exceeds that of rivals. Its hash rate would be much raised if the 50 EH/s aim were reached, more than doubling it from the year’s start.
Following its new approach, Marathon Digital intends to keep all Bitcoin produced and do “periodic strategic open market purchases.” CEO Fred Thiel underlined that these acquisitions mirror the company’s “confidence in the long-term value” of Bitcoin as a “reserve asset.”
