Publicly-Listed Marathon Digital Seeks $500M Funding to Boost its Mining Operations

Nasdaq-listed North American cryptocurrency mining firm, Marathon Digital has announced it will raise the sum of $500 million in debt as convertible senior notes from interested institutional investors. According to the company, the initial purchasers of the convertible senior notes an option to purchase up to an additional $75 million principal amount of notes after 13 days from the date the notes are first issued.

“The notes will be senior, unsecured obligations of Marathon, will accrue interest payable semi-annually in arrears, and will mature on December 1, 2026, unless earlier repurchased, redeemed, or converted. Noteholders will only have the right to convert their notes in certain circumstances and during specified periods,” the announcement reads.

The Marathon Digital debt notes issuance is well-timed to capitalize on the growing interest amongst investors who are ever looking for ways to gain exposure to firms built around the digital currencies. According to Marathon Digital, the funds will be used in boosting its mining operations, in securing hardware miners and Bitcoin acquisitions.

“Marathon intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin or bitcoin mining machines.”

Marathon Digital Prefers to Borrow than Liquidate

Marathon Digital operates as one of the most robust Bitcoin mining operators today. As reported earlier by TheCoinRise, the firm said it increased its total mined Bitcoin for the month of October, capping the productive 3-day period with 417.7 BTC mined from all of its facilities. Up to the end of October, the firm confirmed that it has a total of 2,516 BTC worth more than $160.87 million, going by the current price of Bitcoin pegged at $63,942.49.

“In October, we increased our bitcoin production by 23% month-over-month to 417.7 BTC and increased our total bitcoin holdings to approximately 7,453 BTC,” Fred Thiel, Marathon’s CEO said at the time. “As in prior months, our bitcoin production was impacted by maintenance related outages at the power plant in Hardin, MT, and increases in the total network hash rate. However, with shipments of our previously purchased miners accelerating over the coming months, we continue to expect our bitcoin production to become more consistent as we scale.” 

Despite the robust liquidity of Marathon Digital, it resorted to the debt offering rather than liquidating its Bitcoin holdings and other shares. This position is informed by the trust in the asset class, and in its potentials to grow over time, covering the borrowed sum, and the interest payable.