$700 Million Convertible Note to Power MARA’s Bitcoin Ambitions

MARA Holdings, Inc., a leader in digital asset infrastructure, plans to raise $700 million through the issuance of convertible senior notes due in 2030.

This move provides institutional investors with an opportunity to support the company’s expansion efforts.

MARA Seeks $700 Million to Supercharge Bitcoin Expansion

The notes, issued privately under Rule 144A of the Securities Act of 1933, reflect Marathon Digital’s strategy to balance risk and responsibility. These notes provide investors with semi-annual interest payments and the ability to convert their debt into company stock under specific conditions.

This approach allows MARA to attract capital while retaining flexibility to manage its debt and invest in future growth. The company also reserves the option to increase the offering by an additional $105 million if demand allows.

MARA plans to use $200 million from the offering to repurchase existing convertible notes due in 2026. This move helps them to reduce upcoming financial obligations while taking advantage of favorable market conditions. The company will use the remaining proceeds to acquire more Bitcoin and fund corporate needs, including working capital and potential acquisitions.

Investors holding existing 2026 notes may unwind hedge positions, leading to increased demand for MARA shares. This activity could temporarily push up their stock price, adding volatility during the offering.

The notes will mature on March 1, 2030, with interest payments beginning March 2025. Depending on MARA’s choice, investors can convert the notes into cash, stock, or a mix of both. Conversion rights begin under specific conditions before December 2029 and become open-ended thereafter. They also reserve the right to redeem the notes for cash starting in 2028.

“Something to remember with crypto miners on the back of MARA dilution news… their share counts are vastly different than the 2021 run. MARA has 200%+ more shares than when BTC was all time high 2021 which means $20 now is the same market cap as $60 then,” one analyst on X chimed in.

While the convertible notes offer attractive terms, they also carry potential dilution if converted into shares, which can challenge shareholder value.

By addressing its debt obligations early and securing funds for expansion, MARA aims to strengthen its position in a competitive and fast-evolving sector. Whether or not they can pull off this bold move is another story and sets the stage for significant developments in the years ahead.