Cleanspark To Raise $550 Million In Convertible Notes, Will It Buy Bitcoin?

Bitcoin mining and tech firm Cleanspark has announced its intention to raise $550 million in Convertible Senior Notes offering. As the firm revealed, it is pricing the notes at 0% and will only make it available to qualified investors. Cleanspark said the convertible notes will mature in 2030.

Cleanspark Plans Exclude Bitcoin

The update from the firm shows its plans to offer the notes to the initial purchasers for resale in a private offering as securities. The firm said it will cap the initial price of the notes at $24.66 per share of the company’s common stock. Per the filing, this amount represents 100% premium to the closing price of the stock as of December 12, 2024.

As an added allowance, Cleanspark hinted that it can allow up to a 13-day option to repurchase up to $100 million aggregate principal amount of the notes. If investors exercise this extended repurchase option, the Bitcoin mining firm can raise up to $633.6 million.

While fundraise via convertible notes is not uncommon among US firms, the purpose of this funding is different. Despite being a Bitcoin mining firm, Cleanspark will not use the capital to buy additional BTC. Instead, it said it will designate $145 million to repurchase shares from investors who participate in the notes sales.

In addition, Cleanspark said it will deploy some of the funds to settle its line of credit with Coinbase exchange. The remaining capital will go into capital expenditures, acquisitions and general corporate purposes.

The Unusual Twist With Bitcoin Mining Firms

Unlike Cleanspark, other Bitcoin mining firms like Riot Platforms have raised funds by issuing convertible senior notes. However, unlike the former, Riot Platforms used the proceeds to buy 5,113 Bitcoin for $510 million earlier on December 13.

MARA Holdings have also made this move in the past, solidifying the thesis that Bitcoin miners are increasingly adopting BTC beyond the daily mining operations.

These firms are learning from the MicroStrategy Bitcoin playbook. As reported earlier, MicroStrategy has grown its BTC stash to 423,650 units after its latest 21,550 Bitcoin purchase for $2.1 billion. The goal for this firms is that the price of the coin will continue to appreciate against the US Dollar.

With its treasury reserve success, MicroStrategy is now on track for Nasdaq-100 Index inclusion. Why Cleanspark refused to allocate any amount to Bitcoin remain a puzzle in the broader ecosystem.