MARA Proposes $700 Million Offering for Bitcoin Acquisition
In a significant financial maneuver, Marathon Digital Holdings, Inc. (MARA) has announced its intention to raise an impressive $700 million through a private offering of convertible senior notes. This strategic move is primarily aimed at bolstering their Bitcoin acquisitions and refinancing existing debt. By offering convertible notes, MARA gains the flexibility to convert these financial instruments into shares, providing a safeguard against market fluctuations and ensuring a robust financial strategy to enhance their Bitcoin holdings.
The recent announcement, made via a press release, highlights that the funds raised will also grant initial purchasers a 13-day option to acquire up to an additional $105 million in notes. These notes, which will mature on March 1, 2030, are unsecured and come with semi-annual interest payments commencing March 1, 2025. Out of the total proceeds, up to $200 million is earmarked for repurchasing existing convertible notes due in 2026, with the balance dedicated to Bitcoin purchases and general corporate purposes. Despite this strategic initiative, MARA’s share prices experienced a 5% drop, settling at $19.97 in pre-market trading.
The offering is aimed at qualified institutional buyers under Rule 144A of the Securities Act of 1933. Marathon Digital is granting initial purchasers a 13-day option to buy up to an additional $105 million in notes. These notes will be convertible into cash, Marathon Digital common stock, or a combination thereof, as per the company’s discretion, with interest payments scheduled semi-annually. The final terms of the notes are currently pending determination.
This strategic move by MARA follows in the footsteps of other major companies like MicroStrategy and Metaplanet, who have recently adopted similar debt-based strategies to enhance their Bitcoin holdings. MARA’s approach aligns with the “HODL” strategy—holding onto all mined Bitcoin and planning for continuous acquisitions.
Marathon Digital Trails Closely Behind Microstrategy
This marks Marathon’s second significant issuance of convertible notes this year, following a $250 million raise in August for notes maturing in 2031. In addition, the company secured a $200 million Bitcoin-backed credit line in October to capitalize on strategic opportunities and support its general corporate initiatives.
Currently, Marathon Digital stands as the leading publicly listed mining company in terms of Bitcoin holdings, boasting an impressive total of 27,562 Bitcoin. This substantial holding positions the company as the second-largest public holder of Bitcoin, trailing closely behind industry leader MicroStrategy.
MARA’s strategic decisions underscore the growing trend of public companies venturing into the crypto asset space, potentially signaling a new era where digital currencies become more integrated into corporate financial strategies. As MARA continues to expand its Bitcoin holdings, the implications for the broader market and other public companies considering similar paths remain significant and potentially transformative.
