Marathon Digital has announced a substantial increase in its Bitcoin reserves after purchasing $249 million worth of the cryptocurrency.
Purchase Details
On August 14, Marathon Digital announced that it had used part of the proceeds from the senior note sale to acquire approximately 4,144 Bitcoin at an average price of about $59,500. This move increased the company's strategic Bitcoin reserve to over 25,000 BTC.
Financial Information
The convertible senior notes, due in September 2031, yielded net proceeds of around $292.5 million for Marathon. These notes carry an annual interest rate of 2.125% and can be converted into cash, Marathon stock, or a combination of both. The remaining cash from the note sales will be used to buy more Bitcoin and for 'general corporate purposes,' which may include strategic acquisitions.
Previous Acquisitions and Evaluations
This latest purchase follows a previous acquisition in July, when Marathon bought 2,282 BTC for $124 million. Marathon’s CEO and Chairman Fred Thiel described this move as part of a 'hodl strategy,' a term that has become popular in the crypto community. Marathon shares closed down 2.26% on August 14 at $15.14, reflecting a nearly 34% decline year-to-date. After-hours trading saw a slight additional drop of 0.13% to $15.12. Earlier in August, Marathon’s second-quarter earnings fell short of Wall Street expectations, with revenues of $145.1 million—9% below estimates. However, the company still reported a 78% year-over-year increase from Q2 2023.
Blockbridge noted that large public miners, particularly Marathon, are facing profitability challenges, especially following a decline in miner hash price and profitability after the Bitcoin halving.
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