Crypto Miner Marathon’ Decision to Buy Bitcoin Against Bonds Attracts SEC’s Attention, Stock Tanks 27%

Bhushan Akolkar
November 16, 2021
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Bitcoin Miner Northern Data Revenue 2024

On Monday, November 15, crypto-miner Marathon Digital announced that it is willing to buy more Bitcoin and add new mining equipment to its existing fleet by selling $500 million worth of bonds.

The private offering of the five-year notes will only be only to the qualified institutional players. As said, the proceeds will go further towards buying Bitcoin and mining equipment. However, investors will have the right to convert these notes into common stock in certain circumstances and during specific periods.

Marathon Digital is not the first company selling convertible bonds. Business Intelligence firm MicroStrategy has done it many a times since mid-2020, thus linking its stock even more closely to the performance of the world’s largest cryptocurrency.

Well, if so, why did the Marathon Digital stock (NASDAQ: MARA) correct so heavily on Monday. As Marathon Digital announced its plans, it was quick to draw the SEC’s attention. Citing the company’s last year’s partnership with Montana data facility, the U.S. SEC issued a subpoena to the crypto miner. 

U.S. SEC Issues Subpoena to Marathon Digital

The SEC has asked Marathon digital to produce documents and communications concerning its facility in Hardana, Montana. The SEC has been investigating whether if this poartnership and formation of this facility violated the securities laws. Chris Brendler, an analyst at DA Davidson & Co. told Bloomberg:

“It’s never good news for the SEC following up. Worst case, it’s a fine. Nothing materially changes about the business.”

The SEC scrutiny arrives one year after Marathon’s deal with Beowulf Energy for establishing the Montana facility. In its quarterly filing, Marathon said that it has been co-operating with the SEC.

The news was enough to send jitters across Wall Street. On Monday, November 15, the Marathon Digital (MARA) corrected a staggering 27% from its all-time high of $75. Despite Monday’s price crash, the MARA stock is still 400% up since the beginning of the year.

Advertisement
coingape google news coingape google news
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.