1. Terms of the Offering
2. Use of Proceeds
3. Market Reaction

Singapore-based Bitdeer Technologies Group announced a proposed public offering of $150 million convertible notes due in 2029 to expand its data center and develop ASIC-based mining rigs.

Terms of the Offering

On Aug. 15, Bitdeer announced that the notes would be senior, unsecured obligations of the company, which will mature on Aug. 15, 2029, unless converted, redeemed or repurchased earlier. A senior convertible note is a type of debt security that can later be converted into equity. It’s a form of debt for the company that can also accrue interest payments for the investor over time. A senior convertible note has priority over all other debt securities issued by a company. Holders may convert their notes on the second scheduled trading day immediately after maturity.

Use of Proceeds

When the notes are converted, Bitdeer will pay holders with Class A ordinary shares or a combination of cash and Class A ordinary shares. On Aug. 16, the crypto mining company announced that the notes would accrue an 8.5% interest rate annually. Bitdeer said it would use the funds raised from the offering to expand and develop its business further. “The company intends to use the net proceeds from the offering for data center expansion, ASIC-based mining rig development as well as working capital and other general corporate purposes,” Bitdeer wrote.

Market Reaction

After it announced the convertible notes sale, Google Finance data showed that Bitdeer’s stock price dropped by over 18%. On the 5-day chart, the stock showed a larger price dump at 23%, going from $8.26 on Aug. 9 to $6.33 at the time of writing. Bitdeer is not the only mining firm to suffer blows to its stock prices after announcing a convertible notes offering. On Aug. 14, Bitcoin mining firm Core Scientific saw a 10% drop in stock prices after announcing a $400 million senior convertible notes offering.

Bitdeer’s plan to raise $150 million through the issuance of convertible notes caused a drop in the company's stock price. The funds will be used for business expansion and development, potentially strengthening the company's market position in the long term.