Marathon Digital Holdings just announced that it is planning to raise $250 million by selling convertible senior notes, with all that cash aimed at boosting their Bitcoin stash.
The details are pretty straightforward, even if they sound complicated at first. Marathon is offering these notes in a private deal, not something you or I can just jump into.
They’re targeting big institutional buyers who know what they’re doing. The company’s offering these notes under Rule 144A, which basically means they don’t have to go through the usual Securities Act red tape.
It’s all about speed and efficiency, and Marathon told us it is banking on this approach to get their hands on the cash quickly.
Marathon has a strategy
So, what are these notes? They’re unsecured, meaning there’s no collateral backing them up, but they’re senior obligations. That’s a fancy way of saying that if Marathon hits a rough patch, these noteholders get paid before anyone else.
They come with interest, too—paid out twice a year, every March 1st and September 1st, starting in 2025. The whole thing wraps up on September 1, 2031, unless the notes get redeemed, repurchased, or converted before then.
Marathon has set things up so they can redeem the notes for cash after September 6, 2028, but only if there’s still at least $75 million worth of notes left on the table.
If you’re holding one of these notes, you’ve got the option to force Marathon to buy it back for cash on March 1, 2029. And if you’re wondering about conversion, that’s on the table too.
These notes can be turned into cash, shares of Marathon stock, or a mix of both. But don’t think you can do that just anytime. It’s only allowed under certain conditions until March 1, 2031.
After that, it’s open season until just before the maturity date.
Why Marathon’s raising this cash
The big question is, what’s Marathon planning to do with all this money? Simple—they’re going Bitcoin shopping. That’s right, the company plans to use the entire proceeds from this note sale to buy more Bitcoin.
They’re already one of the biggest holders of Bitcoin among publicly traded companies, and this move is all about doubling down on that strategy.
But Marathon also plans to use some of this cash for general corporate purposes, which could mean anything from paying off debt to expanding their operations or even making strategic acquisitions.
Though like anything in finance, it’s all subject to market conditions. Just because Marathon is planning to raise this money doesn’t mean it’s a done deal.
They said they’re keeping their options open, and there’s always a chance that the offering might not go as planned.
Marathon also mentioned giving the initial buyers of these notes an option to purchase up to an additional $37.5 million worth of notes within 13 days of the first issue.
