TeraWulf plans to offer $400 million in convertible notes

EASTON, Md. - Digital infrastructure company TeraWulf Inc. (NASDAQ:WULF), whose stock has surged over 120% in the past year and is trading near its 52-week high of $9.30, announced Monday its intention to offer $400 million in convertible senior notes due 2031 in a private placement to qualified institutional buyers under Rule 144A of the Securities Act. According to InvestingPro data, the company currently maintains a market capitalization of $3.5 billion.

The company also plans to grant initial purchasers an option to buy up to an additional $60 million in notes within a 13-day period after the initial issuance. The offering remains subject to market conditions and other factors. With current short-term obligations exceeding liquid assets and a current ratio of 0.66, this offering could provide crucial financial flexibility.

According to the press release, TeraWulf intends to use the net proceeds to fund capped call transactions, with remaining funds directed toward data center expansion and general corporate purposes.

The convertible notes will be senior unsecured obligations with interest payable semi-annually beginning March 1, 2026. The notes will mature on September 1, 2031, unless earlier repurchased, redeemed or converted.

Conversion terms specify that prior to June 1, 2031, the notes will be convertible only under certain conditions. The company plans to settle conversions through cash for the principal amount, with the remainder payable in cash, shares of common stock, or a combination, at TeraWulf’s discretion.

In connection with the offering, TeraWulf expects to enter into privately negotiated capped call transactions with initial purchasers or other financial institutions, which are designed to reduce potential dilution to common stock upon conversion.

The notes and any shares issuable upon conversion have not been registered under the Securities Act and will be offered only to qualified institutional buyers under Rule 144A.

TeraWulf develops and operates environmentally sustainable data center infrastructure in the United States for high-performance computing and bitcoin mining. While the company has shown strong revenue growth of nearly 20% in the last twelve months, analysts tracked by InvestingPro maintain a bullish consensus, with an average price target suggesting potential upside. For deeper insights into TeraWulf’s financial health and growth prospects, including 18 additional ProTips and comprehensive valuation metrics, consider accessing the full Pro Research Report available on InvestingPro.

In other recent news, Terawulf Inc. reported its Q2 2025 earnings, showcasing an unexpected positive earnings per share (EPS) of $0.05, which surpassed the forecasted EPS of -$0.06. This represents a surprise improvement of 183.33% and indicates a notable enhancement in the company’s financial health. Additionally, Terawulf recorded actual revenues of $47.6 million, slightly exceeding the anticipated $46.97 million. In other developments, Terawulf announced a new agreement with Fluidstack, a Google-backed customer, to lease 200 MW of capacity at its Lake Mariner facility, with an option for an additional 160 MW. This deal has led JMP Securities to raise its price target for Terawulf from $7.00 to $13.00, while maintaining a Market Outperform rating. Similarly, Rosenblatt increased its price target for Terawulf from $6.00 to $10.50, continuing its Buy rating. Rosenblatt highlighted a "transformational" development in Terawulf’s relationships with Fluidstack and Google as beneficial to the company and the broader sector. These recent developments reflect significant progress for Terawulf in terms of financial performance and strategic partnerships.

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