Marathon Digital Holdings, the largest publicly traded Bitcoin (BTC) miner on Wall Street (NASDAQ: MARA), has successfully completed a $300 million convertible senior notes offering and used a significant portion of the proceeds to purchase Bitcoin.

Marathon Raises $249 Million in Bitcoin

The company issued 2.125% convertible senior notes due 2031 in a private offering to qualified institutional buyers. The net proceeds from the sale were approximately $292.5 million after deducting initial purchaser discounts and commissions.

MARA announced that it purchased approximately 4,144 Bitcoin for $249 million between August 12 and August 14, 2024. The purchase was made at an average price of $59,500 per Bitcoin, including fees and expenses.

MARA secures $300M through an oversubscribed offering of convertible senior notes. With the proceeds, we purchased 4,144 BTC (valued at approximately $249M), increasing our strategic Bitcoin reserve to over 25,000 BTC. More information: photo.twitter.com/EKwKW6eSny

— MARA (@MarathonDH) August 14, 2024

Marathon Digital intends to use the remaining proceeds from the issuance of the notes for additional Bitcoin acquisitions and general corporate purposes, including potential strategic acquisitions and debt repayment.

“We currently own and operate approximately 54% of the 1.1 gigawatts of power in our diversified portfolio of digital asset compute,” said Fred Thiel, chairman and CEO of MARA. “We will grow owned and operated sites to represent a larger percentage of our fleet over time and expect to see cost savings on a cost per petahash basis as we do so. Longer term, our goal is to be among the lower-cost operators in the industry.”

The company is currently the largest cryptocurrency miner on Wall Street, with a market cap of nearly $6 billion. Second-place Clean Spark (NASDAQ: CLSK) is nearly half its size. Its market cap would have been higher if not for recent declines caused by a $138 million fine imposed on the company by a court.

The ruling, handed down by a federal court, found that Marathon breached a confidentiality and non-circumvention agreement with Michael Ho, the chief strategy officer at Marathon’s direct competitor, Hut 8.

Marathon addressed the issue, stating that while they respect the decision, they are convinced that “the jury reached the wrong conclusion.”

“There was no wrongdoing on the part of the company,” Marathon Digital said in a statement sent to Finance Magnates. “We also believe that the damages awarded have no legal basis. We intend to appeal this verdict and file an appeal as soon as possible.”

Miners defy halving odds

Despite the recent halving, the mining sector remains robust overall. This week, two other Wall Street miners, HIVE Digital and TeraWulf, reported strong quarterly performance despite the drop in BTC prices.

HIVE Digital Technologies reported quarterly revenue of $32.2 million, with $29.6 million generated from cryptocurrency mining and another $2.6 million from high-performance computing (HPC) activities. On the other hand, TeraWulf recorded revenue of $35.6 million for Q2 2024, representing a 130.2% increase compared to the same period last year. The company’s gross profit, excluding depreciation and amortization, climbed to $21.7 million, complemented by an adjusted EBITDA of $19.5 million.

MARA Convertible Bonds

The convertible notes, which mature on September 1, 2031, offer holders the option to convert them, at the company’s sole discretion, into cash, shares of Marathon Digital common stock, or a combination thereof. The initial conversion rate is set at 52.9451 shares per $1,000 principal amount, equating to a conversion price of approximately $18.89 per share.

Our latest blog post: Taking advantage of market opportunities: @MarathonDH Strategic Bitcoin Acquisition via Long-Term Convertible Debt $MARAhttps://t.co/ke5qsbDBIv https://t.co/UJ1S4sGckF

— Robert Samuels (@RobSamuelsIR) August 14, 2024

The Company has built-in flexibility with these notes and retains the right to exchange them for cash on or after September 6, 2028, subject to certain conditions. Noteholders may, however, require Marathon Digital to redeem their notes on March 1, 2029 or upon the occurrence of specified fundamental change events.

This latest move by Marathon Digital underscores the growing trend of publicly traded companies investing in cryptocurrencies as part of their treasury management strategies. It also highlights the continued interest in Bitcoin despite its price volatility.

At the close of trading on August 15, 2024, Marathon Digital (MARA) stock was trading at $15.14, down 2.26% for the day.

This article was written by Damian Chmiel on www.financemagnates.com.