On Monday, the enterprise bitcoin mining operation Marathon Digital Holdings announced the firm will raise $500 million from convertible senior notes in order to accrue more “bitcoin or bitcoin mining machines.”
A publicly-listed mining operation will raise $500M from the Debt Markets in order to purchase Bitcoin and ASIC Devices.
Marathon (Nasdaq: MARA), is one of the largest U.S. mining operations and on November 15, the firm revealed it plans to utilize debt markets for “general corporate purposes, including the acquisition of bitcoin or bitcoin mining machines.” The news comes after significant growth during the course of 2021 and at the end of October, Marathon disclosed it had mined 417 bitcoin (BTC). The 417 BTC revenue generated was significantly higher than that of the previous month, with more bitcoin in its bank accounts worth $457 million.
“As in prior months, our bitcoin production was impacted by maintenance-related outages at the power plant in Hardin, MT and increases in the total network hash rate,” Marathon’s CEO Fred Thiel explained. “However, with shipments of our previously purchased miners accelerating over the coming months, we continue to expect our bitcoin production to become more consistent as we scale,” the Marathon executive added.
In a press release sent to Bitcoin.com News, the company said on Monday that it plans to issue “$500,000,000 aggregate principal amount of convertible senior notes” that will mature on December 1, 2026. The notes will obtain interest semi-annually unless they are “repurchased, redeemed or converted,” Marathon’s press release notes.
“Marathon intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin or bitcoin mining machines,” the company disclosed.
Marathon Shares Have Risen More Than 230% in 6 Months — After Controversy Ensued, Bitcoin Mining Firm Dropped OFAC Transaction Filtering in May
The U.S. company’s shares listed on Nasdaq have done well in recent times and Marathon has been holding BTC on its balance sheet like its mining competitors Argo, Hut8, Riot Blockchain, and Bitfarms. MARA shares traded for $22.99 six months prior to May 18th, and shares now trade for $75.92.
Bitcoin.com News reported on Marathon buying BTC for a reserve asset at the end of January following the company’s record-breaking acquisition of 70,000 ASIC bitcoin miners in December 2020. Marathon’s first OFAC-compliant block was controversially mined by the enterprise mining company this year. It meant that at the time, Marathon was filtering transactions to be compliant with the Office of Foreign Assets Control’s (OFAC) sanction guidelines.
After it became clear that Taproot would be upgraded, Marathon decided to end the filtering process. Marathon said the company’s mining pool would “no longer filter transactions” and “begin validating transactions in a manner consistent with all other miners who use the standard node.”
Two months later, the firm revealed it purchased 30,000 S19j Pro Antminers from Bitmain and after it published July’s bitcoin production and mining operation it was revealed that Fidelity Investments owns a 7.4% stake in Marathon.
The latest financing proposal to leverage convertible senior notes indicates the firm continues to believe in the bitcoin mining industry’s exponential growth. At press time, Bitcoin’s hashrate has been once again nearing all-time highs and the current hashrate on November 15, is a whopping 181 exahash per second (EH/s).
How do you feel about Marathon using debt markets in order to raise $500,000,000 to purchase bitcoin and mining rigs. Please comment below to let us know your thoughts on this topic.
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