Marathon Digital Plans $850 Million Convertible Notes Offering

According to Decrypt, Marathon Digital Holdings, a Bitcoin mining company based in Fort Lauderdale, Florida, has announced plans to issue $850 million in convertible notes, with the potential to increase the amount to $1 billion. This move is part of the company's strategy to repurchase existing debt, acquire Bitcoin, and support various corporate initiatives amid a recovering cryptocurrency market. The company revealed that it intends to use $199 million of the anticipated $833 million in net proceeds from the sale to repurchase $212 million of its existing 2026 convertible notes. The remaining funds will be allocated towards acquiring additional Bitcoin and for general corporate purposes, which include working capital, strategic acquisitions, asset expansion, and repayment of other debts. Convertible notes are a financial instrument that allows a company to raise capital by selling debt that can later be converted into equity shares, giving investors partial ownership of the company. Marathon's latest offering comes as several firms worldwide are beginning to acquire and hold Bitcoin on their balance sheets following a market rally that has significantly increased the cryptocurrency's value. Notable companies such as MicroStrategy and Japan’s Metaplanet have been actively acquiring Bitcoin, with MicroStrategy holding up to $30 billion in Bitcoin and Metaplanet purchasing over 1,000 BTC this year, valued at approximately $93 million. Additionally, Semler Scientific recently acquired nearly $18 million in Bitcoin. Starting December 1, 2027, holders of Marathon's convertible notes will have the option to request the company to repurchase them for cash. However, the terms may change if significant events like mergers, acquisitions, or delisting occur. The notes, which mature on March 1, 2030, can also be converted into cash, Marathon stock, or a combination of both. On Tuesday, Marathon Digital's stock was trading at $19.86, marking a 9% increase for the day, while its after-hours price remained relatively stable, according to Google Finance data.