Marathon Digital Holdings, Inc. is set to raise $250 million through a debt offering aimed at acquiring additional bitcoin. The move mirrors the strategy employed by MicroStrategy, a leader in utilizing bitcoin as a reserve asset.
The company’s new offering will involve convertible senior notes that carry semi-annual interest and are scheduled to mature in September 2031. These notes come with provisions for early redemption and can be converted into either cash or Marathon’s common stock. This offering will be available exclusively to qualified institutional buyers, with an additional $37.5 million option for initial purchasers within 13 days of issuance.
Following the announcement, Marathon’s share price fell.
Marathon’s Bitcoin Strategy
Marathon recently bought $100 million worth of bitcoin in late July, bringing its total holdings to over 20,000 bitcoin. This positions Marathon as the second-largest publicly traded holder of bitcoin, according to Bitcoin Treasuries.
MicroStrategy remains the only company with a larger bitcoin reserve. The firm first adopted bitcoin as a reserve asset in 2020 and has also utilized convertible notes to expand its holdings. Other companies, including fintech startup Fold and healthcare firm Semler Scientific, have similarly increased their bitcoin reserves in recent months. Larger firms such as Tesla and Block (formerly Square) have also adopted bitcoin strategies.
Despite the strategic move, Marathon’s stock dropped more than 10% following the announcement. Bitcoin, meanwhile, is trading above $58,600.
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