FORT LAUDERDALE - MARA Holdings, Inc. (NASDAQ:MARA), a company specializing in digital asset compute and energy transformation, has successfully closed its offering of convertible senior notes, raising $1 billion. The offering, which concluded on Wednesday, included $150 million of additional notes purchased by the initial buyers on November 19, 2024, under an option available since the first issuance.
The notes carry a 0.00% interest rate and are due in 2030. They were sold privately to qualified institutional buyers, generating approximately $980 million in net proceeds for MARA after initial discounts and commissions. The company plans to allocate roughly $199 million of these proceeds to repurchase $212 million of its 2026 convertible notes. The remaining funds are intended for bitcoin acquisition and general corporate purposes, including potential strategic acquisitions, asset expansion, and debt repayment.
These unsecured senior obligations will not accrue regular interest, with MARA retaining the option to pay special interest under specific circumstances. The notes will mature on March 1, 2030, unless repurchased, redeemed, or converted earlier. MARA has set conditions under which the notes can be redeemed for cash starting March 5, 2028, and holders may require repurchase on December 1, 2027, or upon a fundamental change as defined in the indenture.
Conversion of the notes into MARA common stock or cash, at the company's discretion, is subject to certain conditions and initially set at a rate of 38.5902 shares per $1,000 principal amount, representing a conversion price of about $25.9133 per share. This price is a 42.5% premium over the average stock price on November 18, 2024.
The repurchase of existing 2026 notes may prompt hedged holders to adjust their positions, potentially affecting MARA's common stock price. The notes and any shares issued upon conversion have not been registered under the Securities Act or state securities laws, and as such, cannot be offered or sold without registration or an applicable exemption.
MARA's press release also contains forward-looking statements regarding the use of proceeds, which are subject to risks and uncertainties detailed in the company's filings with the SEC. This news is based on a press release statement from MARA Holdings.
In other recent news, Marathon Digital (NASDAQ:MARA) Holdings announced its plan to offer $700 million in convertible senior notes due 2030, with an option for purchasers to acquire up to an additional $105 million. The proceeds will be used to repurchase a portion of its existing 2026 convertible notes and for acquiring additional Bitcoin. In financial developments, the company reported third-quarter Bitcoin mining revenue of $131.6 million and an adjusted EBITDA of $21.8 million.
Marathon Digital also revealed its progress in achieving a target hash rate capacity of 50 EH/s by year-end, having already surpassed 40 EH/s. In strategic moves, the company acquired two data centers in Ohio and integrated two-phase immersion cooling tanks into its mining operations. Analyst firms such as B.Riley, Cantor Fitzgerald, and H.C. Wainwright have recognized these developments, adjusting their price targets accordingly.
These recent developments underscore Marathon Digital's ongoing growth and strategic focus within the evolving Bitcoin mining industry.
InvestingPro Insights
MARA Holdings' recent $1 billion convertible note offering aligns with several key financial metrics and trends highlighted by InvestingPro. The company's market capitalization stands at $7.28 billion, reflecting its significant presence in the digital asset and energy transformation sector.
InvestingPro data shows that MARA has experienced substantial growth, with revenue increasing by 131.04% in the last twelve months as of Q3 2024, reaching $598.75 million. This growth trajectory supports the company's ambitious capital raising and strategic initiatives.
Two relevant InvestingPro Tips for MARA are:
1. Analysts anticipate sales growth in the current year, which aligns with the company's expansion plans and potential bitcoin acquisitions using the newly raised funds.
2. MARA operates with a moderate level of debt, a factor that may have influenced its decision to issue convertible notes rather than traditional debt instruments.
These insights are part of 18 additional tips available on InvestingPro, offering investors a comprehensive view of MARA's financial health and market position.
The company's P/E ratio of 36.63 suggests that investors are pricing in future growth expectations, which could be fueled by the strategic use of the new capital. Additionally, MARA's strong return over the last year, with a price total return of 119.5%, indicates investor confidence in the company's direction.
As MARA moves forward with its plans to allocate the new funds, investors may want to closely monitor the company's cash burn rate and its ability to generate returns on these investments, particularly in the volatile cryptocurrency market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.