Marathon Digital Holdings (MARA) has successfully raised $950 million through a private placement of zero-interest convertible notes to institutional investors. These funds will be used to expand the company’s operations and acquire additional bitcoin.
Convertible Terms and Fund Allocation
The deal was completed on July 25 and conducted under SEC Rule 144A, which allows securities offerings to qualified institutional buyers. After expenses, MARA netted approximately $940.5 million. Of the total raised, $18.3 million was allocated to repurchase existing debt, while $36.9 million was used for capped call transactions to minimize dilution if MARA stock rises sharply. Each $1,000 note is convertible into approximately 49 shares, with a conversion price of $20.26 and capped at $24.14 per share. The remaining funds will be used to purchase more bitcoin and fund operational expansion.
Financial Pressure and Liquidity Issues
According to InvestingPro, MARA posted $705 million in revenue over the past 12 months but faces liquidity challenges. Its current ratio stands at 0.79, indicating potential difficulty in covering short-term liabilities. Analysts warn that the firm may face near-term debt service pressure unless revenue improves.
Market Reaction and Analyst Forecasts
The new notes mature in August 2032 and do not bear interest. Investors have the option to purchase an additional $200 million, which would raise the total offering to $1.15 billion. Big firms are watching MARA closely. Piper Sandler now thinks the stock could reach $26 because of its bitcoin plans. UBS set a higher target of $203, based on what it expects MARA to earn. This shows that big investors are paying more attention.
Despite financial difficulties, Marathon Digital Holdings continues to strengthen its position in the bitcoin market, which may serve as an example for other miners looking to follow suit.
