- Marathon Digital plans to sell $ 500 million in convertible bonds, and some proceeds will go to buy bitcoin.
- The crypto worker said separately that the SEC has asked it for information related to a data center in Montana.
- Marathon Digital shares fell as much as 16% during Monday’s session.
Marathon Digital said Monday it plans to sell hundreds of millions of dollars in debt and use some of the funds it raises to buy bitcoin.
Shares fell and the pressure also came after the cryptocurrency miner revealed it had received a regulatory lawsuit related to a data center.
Marathon Digital plans to offer qualified institutional buyers $ 500 million in convertible senior bills expiring in 2026, a statement said. Initial buyers will have the option to purchase an additional $ 75 million in principal of notes, and investors will be able to convert the notes into common stock under certain circumstances and for certain periods, Marathon Digital said.
With potential dilution in prospects, investors pushed the stock down 17% to as low as $ 62.71. There were more than 16 million shares traded, higher than the average daily volume of 11 million shares.
“Marathon intends to use the net proceeds from the offering for general business purposes, including the acquisition of bitcoin or bitcoin mining machines,” it states. The interest rate, the initial conversion rate and other terms surrounding the bond sale will be determined based on the pricing of the offering.
Bitcoin fell 0.7% to $ 64,062 during Monday’s session. Its price has more than doubled in 2021 and reached record highs above $ 67,000 and passed over $ 1 trillion in valuation.
The company said separately that it and some of its executives during the quarter, which ended Sept. 30, received a subpoena to produce documents and communications about a data center in Hardin, Montana.
Marathon Digital said in October 2020 that they had entered into a series of agreements with several parties to design and build a data center of up to 100 megawatts in Hardin.
“We understand that the SEC may be investigating whether there may have been any violations of federal securities laws,” a 10-Q application to the SEC states. “We work with the SEC.”
Marathon Digital shares have risen by more than 500% during 2021.