Marathon Digital Holdings, Inc. (NASDAQ: MARA), the world’s largest public listed Bitcoin miner with a market cap of more than $5 billion, has announced a strategic financial initiative to bolster its Bitcoin holdings through the issuance of $250 million in convertible senior notes.
Thus, Fred Thiel, Chairman and CEO of Marathon Digital is adopting a strategy akin to the “Michael Saylor playbook” by initiating a capital raise through the issuance of convertible notes and senior secured notes, aimed specifically at purchasing additional Bitcoin. Thiel announced via X, “Getting ready to buy more BTC @saylor.”
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Robert Samuels, Vice President of Investor Relations, formally made public via X, “Marathon Digital Holdings, Inc. Announces Proposed Private Offering of $250 Million of Convertible Senior Notes. Proceeds to be used primarily to acquire bitcoin and for general corporate purposes.”
The official press release specifies that the offering targets an aggregate principal amount of $250 million in convertible senior notes due 2031, earmarked for private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Furthermore, Marathon expects to extend an option for the initial purchasers to acquire up to an additional $37.5 million in notes during a 13-day period starting from the issuance date.
The notes are characterized as unsecured senior obligations of Marathon and will accrue interest payable semi-annually in arrears on March 1 and September 1 of each year, with the first payment due in March 2025. The notes are set to mature on September 1, 2031, unless they are earlier repurchased, redeemed, or converted per their terms. Notably, from September 6, 2028, Marathon may opt to redeem the notes for cash, in whole or in part, provided that at least $75 million aggregate principal amount remains outstanding and is not subject to redemption following the notice of redemption.
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Prior to the maturity date of March 1, 2031, the notes are convertible under certain conditions and during specific periods, thereafter convertible at will until the business day preceding the maturity date. The conversion can result in cash, shares of Marathon’s common stock, or a combination thereof, at the discretion of Marathon. The specific interest rate, initial conversion rate, and further detailed terms of the notes will be determined at the pricing of the offering.
Marathon plans to allocate the net proceeds from this offering primarily for the acquisition of additional Bitcoin and for general corporate purposes. These may encompass working capital needs, strategic acquisitions, expansion of existing assets, and the repayment of existing debt and other outstanding financial obligations.
The offering, conditioned upon market factors and other considerations, is not registered under the Securities Act or any state securities laws and is, therefore, restricted to sales in jurisdictions where it is lawful under applicable securities laws. The potential investors will be approached via a private offering memorandum, ensuring compliance with the regulatory framework.
Notably today’s announcement follows a significant purchase by Marathon in July, wherein $100 million in BTC was acquired as part of their strategy to transition towards holding Bitcoin as a strategic treasury reserve asset. On July 25, Thiel wrote via X: “Today Marathon is proud to announce that to strengthen our strategy of holding Bitcoin as our strategic treasury reserve asset, we have over the past month purchased $100 million in BTC, and will now go full HODL @saylor.”
At press time, BTC traded at $59,645.
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