1. Marathon’s Convertible Senior Note Offering
2. Purpose of the Fundraise
3. Financial and Operational Context

Marathon Digital Holdings, the world’s largest publicly traded Bitcoin miner, is set to raise $250 million through a new offering of convertible senior notes. This move aims to enhance its Bitcoin acquisition strategy and support various corporate needs.

Marathon’s Convertible Senior Note Offering

The convertible senior notes will be unsecured senior obligations, meaning they are not backed by collateral but have priority over other forms of debt in case of liquidation. The interest on these notes will be paid semi-annually, starting March 1, 2025, and maturing on September 1, 2031. According to Marathon, the firm reserves the right to redeem them earlier under certain circumstances. The offering will be conducted privately, targeting institutional buyers under Rule 144A of the Securities Act. Holders of the notes will have the option to convert them into cash, shares of Marathon’s common stock, or a combination of both, depending on the company’s election. The terms of conversion, including the interest rate and conversion rate, will be determined during the pricing of the offering. Marathon also plans to grant initial purchasers an option to buy up to an additional $37.5 million in notes within a 13-day window from the issuance date. However, the completion of this offering depends on market conditions and other factors.

Purpose of the Fundraise

Marathon Digital intends to use the proceeds from this offering primarily to acquire additional Bitcoin. The funds will also support general corporate purposes, including working capital, strategic acquisitions, asset expansion, and debt repayment. The company has already demonstrated a significant commitment to Bitcoin. Marathon holds over 20,818 BTC, valued at approximately $1.23 billion at current prices, which is more than double the amount held by its closest competitor, Hut 8. Recently, Marathon purchased $100 million worth of Bitcoin in the open market and reverted to its strategy of holding all mined BTC.

Financial and Operational Context

Marathon’s financial performance has seen notable fluctuations. The company reported a substantial net loss of $199.7 million for the second quarter of 2024, a sharp increase from the $9 million loss reported in the same period last year. In response to these challenges, Marathon sold 51% of the Bitcoin it mined in Q2 2024 to cover operating costs. Despite this, the company remains optimistic about its Bitcoin acquisition strategy. The new convertible notes offering is a strategic move to strengthen its position in the Bitcoin market and navigate the financial turbulence.

Marathon Digital Holdings is taking strategic steps to strengthen its position in the Bitcoin industry through the issuance of convertible senior notes. These actions aim to expand the company’s assets and support its long-term strategy.