As a seasoned crypto investor with a knack for spotting promising opportunities, this latest move by Marathon Digital Holdings caught my attention. Raising $1 billion without issuing traditional equity and tapping into the institutional market through Rule 144A is a strategic move that could potentially position Marathon to capitalize on the growing institutional adoption of Bitcoin.
Today, Marathon Digital Holdings confirmed the completion of its $1 billion offering for zero-percent convertible senior notes maturing in 2030. These funds were procured through a private placement to accredited investors, following Rule 144A of the Securities Act of 1933.
As stated in the official announcement, the offer contained an extra $150 million worth of notes, which were fully purchased by the initial buyers on November 19, 2024.
As an analyst, I’d rephrase it as follows: After accounting for discounts and commissions, the total sales revenue came close to $980 million. However, this figure doesn’t include other offering expenses yet. Marathon Digital has earmarked around $199 million of these funds for the repurchase of about $212 million in principal amount of its 2026 convertible notes.
As an analyst, I can affirm that any surplus funds we have at hand will be allocated towards procuring more Bitcoin and addressing our corporate needs, such as potential strategic acquisitions, settling outstanding debts, or expanding our existing assets.
These unsecured senior obligations, not earning regular interest or increasing in value with time, can be exchanged for cash, MARA common stock shares, or a mix of both at the company’s choice. The initial exchange price is fixed at $25.9133 per share, providing a 42.5% premium over the average Marathon stock price on November 18, 2024.
Starting from March 5, 2028, these notes can be exchanged for cash by Marathon under specific terms. They will reach maturity on March 1, 2030, although they may be repurchased, redeemed, or converted before that date if circumstances permit.
As stated in the news announcement, “These notes were exclusively distributed through a confidential document known as a private placement memorandum.” These specific securities aren’t registered under the U.S. Securities Act or any other relevant securities laws, which means they cannot be sold or offered to the public unless there are applicable exemptions in place.
Right now, Marathon currently possesses roughly 27,000 Bitcoins, placing it as the second biggest Bitcoin holder among publicly traded companies. With the proceeds from this sale, Marathon intends to strengthen its status in the market, taking advantage of the increasing institutional interest in Bitcoin.
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2024-11-21 20:04