Marathon Digital Holdings, Inc. (NASDAQ: MARA), the world’s largest publicly traded bitcoin mining company with a market capitalization of over $5 billion, has announced a strategic financial initiative to bolster its bitcoin holdings by issuing $250 million in convertible senior notes.
So Fred Thiel, chairman and CEO of Marathon Digital, is taking a “Michael Saylor playbook”-like strategy by initiating a capital raise through the issuance of convertible bonds and senior secured notes, specifically intended to purchase additional bitcoins. Thiel x.com/fgthiel/status/1822953509991403947″ target=”_blank” rel=”noopener nofollow”>announced via x, “Getting ready to buy more btc @saylor.”
Robert Samuels, Vice President of Investor Relations, officially announced via x: “Marathon Digital Holdings, Inc. announces a proposed private offering of $250 million of convertible senior notes. The proceeds will be used primarily to acquire bitcoin and for general corporate purposes.”
A $250 million bitcoin purchase is coming
The official press release specifies that the offering is targeting $250 million aggregate principal amount of convertible senior notes due 2031, intended for private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In addition, Marathon expects to extend an option for the initial purchasers to purchase up to an additional $37.5 million of notes for a period of 13 days from the date of issuance.
The notes are characterized as senior unsecured obligations of Marathon and will bear interest payable semiannually in arrears on March 1 and September 1 of each year, with the first payment due in March 2025. The notes will mature on September 1, 2031, unless earlier repurchased, redeemed or converted in accordance with their terms. In particular, beginning September 6, 2028, Marathon may elect to redeem the notes for cash, in whole or in part, provided that an aggregate principal amount of at least $75 million remains outstanding and is not subject to redemption after notice of redemption.
Prior to the March 1, 2031 maturity date, the notes are convertible under certain conditions and for specified periods, and then convertible at will until the business day preceding the maturity date. Conversion may result in cash, Marathon common stock, or a combination of both, at Marathon's discretion. The specific interest rate, initial conversion rate, and additional detailed terms of the notes will be determined at the time of pricing the offering.
Marathon plans to use the net proceeds from this offering primarily toward the acquisition of additional bitcoin and general corporate purposes. These may include working capital needs, strategic acquisitions, expansion of existing assets, and the repayment of existing debt and other outstanding financial obligations.
The offering, which is subject to market factors and other considerations, is not registered under the Securities Act or any state securities laws and is therefore restricted to sales in jurisdictions where it is legal under applicable securities laws. Potential investors will be contacted through a private offering memorandum, ensuring compliance with the regulatory framework.
It is worth noting that today's announcement follows a significant purchase made by Marathon in July, in which $100 million worth of btc was acquired as part of its strategy to transition towards holding bitcoin as a strategic treasury reserve asset. On July 25, Thiel x.com/fgthiel/status/1816445977059868780″ target=”_blank” rel=”noopener nofollow”>wrote via x: “Today Marathon is proud to announce that to strengthen our strategy of holding bitcoin as our strategic treasury reserve asset, over the last month we have purchased $100M worth of btc and will now be fully HODLing @saylor.”
At the time of writing, btc was trading at $59,645.
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