Marathon Digital Announces $250 Million Convertible Note Offering to Boost Bitcoin Holdings
Marathon Digital Holdings, Inc., one of the world’s largest Bitcoin mining companies, has announced plans to offer $250 million in convertible senior notes due 2031 in a private placement to qualified institutional buyers. The company intends to use the net proceeds primarily to acquire additional Bitcoin and for general corporate purposes, signaling a significant expansion of its cryptocurrency holdings strategy.
The unsecured, senior notes will bear interest payable semi-annually and mature on September 1, 2031, unless earlier repurchased, redeemed, or converted. Marathon also plans to grant initial purchasers an option to buy up to an additional $37.5 million in notes within a 13-day period after issuance.
This move comes as part of Marathon’s recently announced “full hodl” strategy, aiming to strengthen Bitcoin as a strategic treasury reserve asset for the company. In July, Marathon increased its Bitcoin holdings by $124 million, reaching a total of 20,818 BTC worth over $1.14 billion as of August 6.
The offering reflects a growing trend among some publicly traded companies to use debt to finance Bitcoin acquisitions. However, industry experts have expressed mixed opinions about the strategy. Some analysts draw parallels to MicroStrategy’s approach but caution that Marathon’s business model as a Bitcoin miner may make managing this debt more challenging, especially considering potential post-halving struggles in the mining industry.
Critics warn that this move could expose Marathon to increased risk if the cryptocurrency market experiences a downturn. There are concerns about the company potentially overleveraging itself and moving away from its core mining business into more speculative territory.
Despite these concerns, supporters of the strategy argue that it represents a well-thought-out approach to balance sheet management, betting on Bitcoin yield outperforming debt costs in the long term.
The announcement has had an immediate impact on Marathon’s stock, with shares falling approximately 3% in pre-market trading following the news.
