Mara Holdings, a company specializing in cryptocurrency mining and blockchain technology, has completed the issuance of $1 billion in zero-coupon convertible bonds due on March 1, 2030. The company plans to use a significant portion of the proceeds to purchase Bitcoin.
These bonds, issued to institutional investors under Rule 144A of the Securities Act of 1933, have a conversion price significantly higher than Mara's recent stock price. The bonds can be redeemed under favorable conditions from 2028.
Approximately $199 million, equivalent to 20% of the capital, will be allocated to address upcoming debt obligations. The remaining funds will support strategic investments, business growth, and the purchase of Bitcoin (BTC).
This development follows a similar approach to MicroStrategy, which recently increased its bond sales to $2.6 billion to purchase BTC - reinforcing market confidence in the potential for cryptocurrencies to reach $100,000.
Debt Repurchase and BTC Acquisition
According to the company's official press release, they intend to allocate $199 million out of the $980 million in net proceeds to repurchase $212 million in convertible bonds due in 2026.
The remaining capital will be allocated to strategic investments and working capital, and will be used to purchase additional Bitcoin.
The new bonds have an initial conversion price of approximately $25.91 per share, representing a 42.5% premium over the medium trading price prior to the bond pricing.
Trump's Term May Boost BTC Mining
Fred Thiel, Mara's chairman and CEO, expressed optimism about the future of Bitcoin mining at the Bitcoin 2024 conference held in Nashville in July.
Thiel explained that "under the Trump administration," he expects the BTC mining industry to "flourish," in contrast to the Harris administration, which he believes "does not know what the energy policy will be."
Since Trump's victory in the election on November 5, Thiel's enthusiasm for the industry's development seems to align with Mara's focus on allocating capital to Bitcoin acquisition transactions.
MARA's Q3 Earnings Deficit Leads to 9% Decline
Mara's third-quarter earnings, reported on November 12, recorded a loss of $0.34 per share, exceeding analysts' expectations. This led to a 9.1% decline in after-hours trading.
Despite the decline, the company reported a 34.5% increase in revenue compared to the same period last year, reaching $131.6 million. However, this figure was still lower than the $148.1 million analysts had predicted.
On November 11, Mara's stock surged 30% as Bitcoin approached $90,000, contributing to a 10% increase in the company's stock price since the beginning of the year.
