On August 12, Marathon Digital Holdings, Inc. MARA, one of the world’s largest Bitcoin mining firms, announced its plans to privately offer $250 million in convertible senior notes due 2031. This offering, which will be made to qualified institutional buyers under Rule 144A of the Securities Act of 1933, is subject to market conditions and other factors.
The proposed notes will be unsecured senior obligations of Marathon Digital and will bear interest payable semi-annually, starting 1 March 2025, with the notes set to mature on 1 September 2031. Holders of the notes will have the option to convert them into cash, shares of Marathon’s common stock, or a combination of both at the company’s discretion. The notes will be convertible under certain conditions before March 2031 and freely convertible thereafter until two days before the maturity date.
Marathon Digital has also included an option for the initial purchasers to acquire an additional $37.5 million in notes within a 13-day period from the initial issuance date. Additionally, starting 6 September 2028, Marathon reserves the right to redeem all or part of the notes, provided that at least $75 million of the principal amount remains outstanding if fewer than all notes are redeemed.
The company intends to use the proceeds from this offering primarily to purchase additional bitcoin. Other potential uses include general corporate purposes such as working capital, strategic acquisitions, expansion of existing assets, and debt repayment.
It is important to note that these notes and any shares of Marathon’s common stock issued upon conversion are not registered under the Securities Act and will be offered solely to qualified institutional buyers through a private offering memorandum.
On July 25, Marathon Digital announced that it had purchased $100 million worth of Bitcoin, bringing its total holdings to over 20,000 BTC. This move underscores Marathon’s commitment to expanding its Bitcoin reserves. The company also declared that it would adopt a full HODL (Hold On for Dear Life) strategy, retaining all Bitcoin mined in its operations and periodically making strategic open market purchases.
Fred Thiel, Marathon’s chairman and CEO, stated that adopting a full HODL strategy reflects the company’s strong belief in Bitcoin’s long-term value. Thiel emphasized that Bitcoin is, in their view, the world’s best treasury reserve asset, advocating for governments and corporations to consider holding Bitcoin as part of their reserves.
Salman Khan, the company’s chief financial officer, explained that Marathon had previously followed a similar strategy before 2023. He noted that given the current favorable conditions for Bitcoin, including increased institutional support and an improving macroeconomic environment, the company decided to reimplement this approach. Khan highlighted that the recent decline in Bitcoin’s price, combined with Marathon’s strong balance sheet, provided an opportune moment to increase their holdings. The company plans to continue leveraging its technological expertise to support the Bitcoin and distributed digital asset ecosystems.
