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In a bold step, MARA Holdings, Inc. has announced they’re raising a staggering $700 million through a private offering of Convertible Notes Primarily For Bitcoin purchases.
Convertible notes offer flexibility, allowing the company to potentially convert these notes into shares, providing a cushion against market volatility while securing funds to bolster their Bitcoin holdings.
What do you think about MARA’s strategic Bitcoin acquisition? Is this the beginning of a new era for public companies and crypto assets?
MARA Proposes $700 Million Offering for Bitcoin Acquisition
In a latest press release on Monday, Marathon Digital Holdings (MARA) revealed that it plans to raise $700 million through a private offering of convertible senior notes, with proceeds aimed at Bitcoin acquisitions and debt refinancing. Marathon Digital will grant initial purchasers a 13-day option to buy up to an additional $105 million in notes.
The notes, maturing on March 1, 2030, will be unsecured and carry semi-annual interest payments beginning March 1, 2025. Notably, it intends to use up to $200 million of the proceeds to repurchase its existing convertible notes due in 2026, with the remaining funds allocated for Bitcoin purchases and general corporate purposes. However, the share prices fell 5% to $19.97 in pre-market trading.
As mentioned in the press release, the offering targets qualified institutional buyers under Rule 144A of the Securities Act of 1933. Marathon Digital will grant initial purchasers a 13-day option to buy up to an additional $105 million in notes.
The notes will be convertible into cash, Marathon Digital common stock, or a combination of both, at the company’s discretion, with interest payments scheduled semi-annually.
Notably, the news follows similar moves by MicroStrategy and Metaplanet in their recent debt-based bitcoin purchase strategies. MARA adopts a “HODL” approach which is similar to MicroStrategy, keeping all mined Bitcoin and planning to make ongoing purchases.
Marathon Digital Trails Closely Behind Microstrategy
This marks Marathon’s second significant convertible notes issuance this year, after a $250 million raise in August for notes maturing in 2031. In October, the company also secured a $200 million Bitcoin-backed credit line to grab strategic opportunities and support its general corporate initiatives.
Marathon Digital is currently the leading publicly listed mining company in terms of Bitcoin holdings, possessing a total of 27,562 Bitcoin. This places the company as the second-largest public holder of BTC, closely behind MicroStrategy.