Marathon To Raise $250 Million To Buy More Bitcoin

08/12/2024 22:04

Marathon is raising money to purchase more bitcoin in a move that appears to be following the MicroStrategy playbook.

<p>Eva Marie Uzcategui/Bloomberg via Getty Images</p> Fred Thiel, chief executive officer of Marathon Digital Holdings, listens during the Bitcoin 2021 conference in Miami, Florida, U.S., on Saturday, June 5, 2021. — Eva Marie Uzcategui/Bloomberg via Getty Images
Fred Thiel, chief executive officer of Marathon Digital Holdings, listens during the Bitcoin 2021 conference in Miami, Florida, U.S., on Saturday, June 5, 2021.

Key Takeaways

Marathon to raise $250 million via debt offering to buy more bitcoin.
Marathon currently holds more than 20,000 bitcoin on its balance sheet.
MicroStrategy first popularized the use of bitcoin as a reserve asset in 2020 and has also raised debt to add to its bitcoin reserves.

Bitcoin miner Marathon Digital Holdings, Inc. (MARA) is raising $250 million via a debt offering to buy more bitcoin, as the company appears to be following the MicroStrategy (MSTR) playbook.

The company's convertible senior notes will bear semi-annual interest and are set to mature in September 2031, with provisions for early redemption and conversion into cash or MARA’s common stock. This offering will only be available to qualified institutional buyers and includes an option for initial purchasers to acquire an extra $37.5 million in notes within 13 days of issuance.

The company's shares fell after the announcement.

Marathon Bets Big On Bitcoin

Marathon recently announced a purchase of $100 million worth of bitcoin in late July, and the company currently holds more than 20,000 bitcoin on its balance sheet. This makes them the publicly traded company with the second-largest bitcoin holdings, according to Bitcoin Treasuries.

MicroStrategy is the only publicly traded company that holds more bitcoin than Marathon. MicroStrategy employed this strategy of offering convertible notes in an effort to buy more bitcoin earlier this year. The data provider first adopted bitcoin as a reserve asset in 2020.

More companies are now getting on board with holding the cryptocurrency on their balance sheets. Fintech startup Fold and healthcare company Semler Scientific (SMLR) also made similar moves in recent months. Larger companies, such as Tesla (TSLA) and Block (SQ) (formerly Square), have also adopted a bitcoin strategy in recent years.

Following the announcement of their convertible note offering, Marathon is down more than 10% on Monday. Meanwhile, bitcoin is trading above $58,600.

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