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Investing.com -- Bit Digital Inc (NASDAQ:BTBT) stock dropped 11.9% in after-hours trading Monday following the company’s announcement of a proposed $100 million convertible senior notes offering.
The cryptocurrency mining company revealed plans to issue convertible senior notes due 2030, with an additional option for underwriters to purchase up to $15 million in notes to cover over-allotments. The notes will be senior, unsecured obligations maturing on October 1, 2030, unless converted, redeemed, or repurchased earlier.
Bit Digital indicated that proceeds from the offering will primarily be used to purchase Ethereum, with remaining funds potentially allocated to general corporate purposes, including investments, acquisitions, and other digital asset-related business opportunities.
The interest rate, initial conversion rate, and other key terms for the notes will be determined at pricing. Upon conversion, the company may settle in cash, ordinary shares, or a combination of both, at its discretion.
Barclays, Cantor, and B. Riley Securities are serving as joint lead book-running managers for the offering.
The negative market reaction suggests investors may be concerned about potential dilution if the notes are converted to equity, or about the company taking on additional debt to invest in volatile cryptocurrency assets.
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