Marathon Digital’s $250M Convertible Notes To Buy Bitcoin Oversubscribed

Marathon Digital recently announced plans to offer $250 million aggregate amount worth of convertible senior notes. The company intended to use the new raise to fund more Bitcoin (BTC) acquisition plans and general corporate purposes. However, soon after the revelation, the convertible notes became oversubscribed, underscoring rising institutional interest.

Marathon Digital’s $250M Convertible Notes Drives Institutional Enthusiasm

Marathon Digital disclosed plans to offer $250 million in senior convertible notes based on market conditions, which soon became oversubscribed. Qualified institutional buyers were granted eligibility for the notes which are due in 2031. These notes will fund the company’s Bitcoin acquisition plans as multiple firms continue to purchase the asset amid increased demand this year. 

“MARA intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes, which may include working capital, strategic acquisitions, expansion of existing assets, and repayment of debt and other outstanding obligations. The notes will be offered and sold to persons reasonably believed to be qualified institutional buyers under Rule 144A under the Securities Act.”

Marathon Digital will also include an offer for institutional investors to purchase an additional $37.5 million principal amount of notes in a 13-day period starting from when the notes were first issued. Furthermore, the notes will be unsecured senior obligations of the company with interests payable twice a year starting from March 1 2025 to September 1, 2031. 

Further, the notes will be convertible into cash, shares of MARA’s common stock, or a combination of cash and shares of MARA’s common stock, as per an official announcement by the firm. The recent oversubscription of the $250 million worth notes underscored strong institutional  interest in the investment product. “The conversion rate for the notes will initially be 52.9451 shares of MARA common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $18.89 per share,” the firm added.

Companies Add Bitcoin To Balance Sheet

Per the release, the company will utilize the newly raised capital to acquire Bitcoin amid increased demands from institutional investors. Following in the footsteps of Michael Saylor’s MicroStrategy, Marathon Digital will amass new assets to its balance sheet. Most companies have recorded gains from the strategy amid macroeconomic conditions and other factors. 

Metaplanet, Selmer Scientific, and Block Inc. also added the asset to their balance sheet. These moves by institutional firms have significantly impacted the market sentiment driving investors to the asset class. At press time, MARA trades at $15.66, declining 8% today while MSTR stands at $131.67, a 2% drop.