Marathon Digital Raises $950 Million to Expand Bitcoin Holdings and Mining Operations
Marathon Digital Holdings (NASDAQ: MARA) has successfully raised $950 million through a private convertible notes offering aimed at expanding its Bitcoin mining operations and acquiring more BTC. The transaction, completed on July 25, reflects growing institutional confidence in both Marathon and the broader cryptocurrency sector.
Convertible Offering Breakdown
The fundraising was structured under SEC Rule 144A, targeting qualified institutional buyers. After expenses, Marathon netted $940.5 million, marking one of the largest capital raises in the crypto mining sector this year.
Key terms of the offering include:
- Zero-interest notes maturing in August 2032
- Convertible at $20.26 per share, capped at $24.14
- Each $1,000 note convertible into 49 shares
- $18.3M allocated to buy back existing debt
- $36.9M used for capped call transactions to limit dilution
An additional $200 million in notes may be issued if the over-allotment option is exercised, potentially boosting the total offering to $1.15 billion.
Strategic Goal: More Bitcoin
The primary use of proceeds is to purchase more Bitcoin and scale up mining infrastructure. Marathon currently holds nearly 50,000 BTC, valued at over $5.75 billion, making it one of the largest Bitcoin holders among publicly traded companies.
Despite operational headwinds, MARA remains committed to long-term growth. The company aims to cement its leadership in the North American mining space.
Financial Pressures Still Linger
However, Marathon is not without its challenges. According to InvestingPro, the company earned $705 million in revenue over the past year but is grappling with liquidity concerns. With a current ratio of 0.79, it may struggle to meet short-term obligations unless earnings improve.
Analysts are split. Piper Sandler set a price target of $26, while UBS has a significantly more bullish outlook at $203, citing aggressive BTC acquisition and future earnings potential.
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