Key Points
- Marathon Digital purchased $249 million worth of Bitcoin using funds from a $300 million offering of convertible senior notes.
- The company plans to use the remaining funds to acquire more Bitcoin and for general corporate purposes.
Marathon Digital, a leading public Bitcoin miner, recently acquired Bitcoin worth $249 million. This purchase was made possible by the funds raised from a $300 million offering of convertible senior notes.
Raising Funds and Buying Bitcoin
The company’s press release on August 14 revealed that it had raised $300 million. After deducting discounts and commissions, the net amount came down to $292.5 million. From this, Marathon used $249 million to acquire 4,144 BTC at an average price of $59,500.
The funds were generated through a debt security offering of 2.125% senior notes due in 2031. These notes were sold in a private offering that was oversubscribed by qualified institutional buyers.
Use of Remaining Funds and Future Plans
Marathon intends to use the remaining $43 million for buying more Bitcoin and for other corporate purposes. These include debt repayment and strategic expansions.
In July, Marathon bought $100 million worth of BTC and announced its decision to retain all the Bitcoin it mined in the future. With the addition of the recently purchased 4,144 BTC, the company now holds over 25,000 coins, valued at $1.46 billion.
Despite this significant purchase, Marathon Digital’s stock declined by 2.26% to $15.14 at the close of business on August 14. The company’s second quarter revenues for 2024 also fell short of expectations, reaching only $145 million compared to the $165.2 million earned between January and March 2024. The increased cost of Bitcoin mining, which doubled even as Marathon increased its hash rate, could be a possible reason for this shortfall.
However, Marathon’s year-on-year growth increased by 78%, with the company earning only $81.8 million in Q2 2023. The company also added approximately 25,000 new Bitcoin mining rigs to its operations, bringing the total to around 250,000 machines. This resulted in an increase in its hash rate to 24.7 EH/s, outperforming some of its biggest competitors, including Riot and Core Scientific.
