Marathon to Offer $500 Million Notes to Buy More Bitcoin and Miners

key takeaways

Marathon shares (MARA) were last trading down $8.36, or 11.01%, at $67.79 as of 12:15 pm ET on Monday
Last week, the company reported its third quarter earnings total revenue rose 76% from the previous quarter

Marathon Digital Holdings has announced plans to offer $500 million of convertible senior notes to acquire more bitcoin and bitcoin mining machines.

The convertible securities will be a private offering of five-year notes to “qualified institutional buyers.”

Initial purchasers will also have the option to buy an additional $75 million principal amount of notes and investors can convert the notes to common stock “in certain circumstances and during specified periods,” the release stated.

“The notes will be senior, unsecured obligations of Marathon will accrue interest payable semi-annually in arrears and will mature on December 1, 2026, unless earlier repurchased, redeemed, or converted,” the release stated.

Marathon is a digital asset technology company that mines crypto and focuses on the blockchain ecosystem and generation of digital assets, it said.

The company is one of the largest publicly-traded bitcoin miners in the US and has approximately 133,120 miners. It plans to produce around 13.3 EH/s of hashing power and fully deploy that rate by July 2022.

Last week, the company reported its third-quarter earnings total revenue rose 76% from $29.3 million in the second quarter of 2021 to $51.7 million in this most recent quarter.

Separately, Marathon’s investment fund also purchased 4,812.66 bitcoin for about $150 million in January and the value rose $58.8 million within the first nine months of having it, the earnings report said.

Marathon holds all of the bitcoin it produces, CEO Fred Thiel told Blockworks in an interview in October. At the time, Thiel said once bitcoin reaches $55,000, he expects the price will likely quickly jump to $75,000. Bitcoin is currently priced around $64,000 after hitting all-time high of $69,000 on November 10, according to Coinbase data.

In August, Marathon purchased 30,000 miners for $120.7 million from China’s largest maker of cryptocurrency mining machines, Bitmain. The company anticipated the miners to ship between a six-month period of January 2022 to June 2022, it said.

Marathon shares (MARA) were last trading down $8.36, or 11.01%, at $67.79 as of 12:15 pm ET on Monday.

Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.