Marathon Digital Holdings announced the closing of its offering of 2.125% convertible senior notes due 2031. The company used the proceeds from the sale to acquire 4,144 BTC for $249 million, at an average price of $59,000 per BTC.
The latest purchase increased the company’s BTC reserves to 25,000 BTC and came after CEO and chairman Fred Thiel stated the company was adopting a HODL strategy for the asset.
Marathon Digital’s Latest BTC Purchase
According to a statement by Marathon Digital, the company used a part of the proceeds from the sale of the senior notes, which amounted to an approximate figure of $292.5 million. The convertible senior notes are due in September 2031, bear an annual interest rate of 2.125%, and can be converted into cash, Marathon Digital (MARA) stock, or both. The raise allowed Marathon Digital to purchase 4,144 BTC at an average cost of $59,000 per BTC.
“MARA secures $300M through an oversubscribed offering of convertible senior notes. With proceeds, we purchased 4,144 BTC (valued at approx. $249M), boosting our strategic bitcoin reserve to over 25,000 BTC.”
Marathon Digital further added that it plans to use the remaining cash generated from sales to purchase more BTC and for general corporate purchases, including strategic acquisitions. Subject to conditions, Marathon Digital can redeem all or a certain portion of notes for cash at a redemption price equal to 100% of the principal amount of notes to be redeemed, along with accrued and unpaid interest.
“The net proceeds from the sale of the notes were approximately $292.5 million, after deducting the initial purchaser’s discounts and commissions but before estimated offering expenses payable by MARA. On August 14, 2024. MARA intends to use the remaining net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes, which may include working capital, strategic acquisitions, expansion of existing assets, and repayment of debt and other outstanding obligations.”
The Premier Strategic Treasury Asset
According to a spokesperson from Marathon Digital, the company regards BTC as the premier strategic treasury asset, which is why it has adopted a multifaceted strategy for acquiring it. Marathon Digital has been purchasing BTC at regular intervals, with its last purchase coming in July 2024, when the company purchased 2,282 BTC for $124 million.
Marathon Digital’s second-quarter earnings missed estimates by Wall Street after it posted revenues of $145 million, 9% lower than previously anticipated. However, despite the drop in numbers, the company still enjoyed a 78% year-on-year increase compared to Q2 2023. The drop in Marathon Digital’s second-quarter earnings comes as profitability from crypto mining hit a record low after the halving event. Miner hash price also dropped to a record low in early August as reports suggested major public Bitcoin miners will struggle to be profitable.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
