Marathon Digital buys $249 million of Bitcoin, Now holds 25k BTC

The leading cryptocurrency mining company, Marathon Digital has purchased $249 million worth of Bitcoin on August 15. This acquisition increases the company's total Bitcoin holdings to over 25,000 BTC.

Ahead of the purchase, the company closed its offering of 2.125% convertible senior notes due 2031, raising an aggregate principal amount of $300 million. This includes a $50 million over-allotment option exercised by initial purchasers, marking a significant step in the company’s strategic financial planning.

Marathon announced that the acquisition of approximately 4,144 Bitcoin for around $249 million was carried out between August 12 to August 14, 2024 – at an average price of $59,500 per BTC. The company plans to use the remaining net proceeds from the notes offering to acquire additional Bitcoin and for other corporate initiatives.

Key Details in the Offering

The notes, sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933, will mature on September 1, 2031. They bear interest at an annual rate of 2.125%, payable semi-annually on March 1 and September 1, beginning in 2025. 

The notes are unsecured, senior obligations of Marathon and come with provisions for redemption and repurchase under specific conditions.

The net proceeds from this offering amounted to approximately $292.5 million after deducting initial purchasers’ discounts and commissions. These funds will be allocated towards purchasing additional Bitcoin and for general corporate purposes, including working capital, strategic acquisitions, and expansion of existing assets.

Convertible Notes

These notes are convertible into cash, shares of Marathon’s common stock, or a combination of both at the company’s discretion. The initial conversion rate is set at 52.9451 shares per $1,000 principal amount, translating to an initial conversion price of approximately $18.89 per share. This conversion rate is subject to adjustment based on specific events.

On or after September 6, 2028, Marathon may redeem the notes for cash under certain conditions if its common stock trades at 130% or more of the conversion price for a specified period. 

Additionally, holders have the right to require Marathon to repurchase the notes on March 1, 2029, or upon certain fundamental changes, at 100% of the principal amount plus accrued interest.