Marathon Digital Plans to Sell $250M of Convertible Notes to Purchase More Bitcoin

The Bitcoin miner said it would sell the notes in a private placement with each note paying interest every six months, maturing on 1 September 2031.

Bitcoin miner Marathon Digital is planning to sell $250 million of convertible notes to purchase more BTC.

The notes will be sold in a private placement, the company said in a statement on Monday. Each note will pay interest every six months, and they will mature on 1 September 2031. The interest and conversion rates will be determined during the pricing process.

Marathon said it 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."

Marathon currently holds more than 20,800 Bitcoin, valued at over $1.2 billion, far exceeding its peers. Competitors Hut 8 Corp and Riot Platforms hold around 9,000 BTC.

In Q2, Marathon sold 51% of its mined Bitcoin to fund its operating costs but recently bought $100 million worth of BTC and plans to hold the assets in its balance sheet.

Marathon saw its stock price tumble after reporting weaker-than-expected revenue for the second quarter.

The company blamed operational challenges, including equipment failures and transmission line maintenance, as well as the Bitcoin halving event in April, for impacting its BTC production – Marathon said the average cost per BTC mined in the second quarter of 2024 was 136% higher than in the prior year period.

Its reported revenue of $145.1 million for the quarter missed analyst estimates by 9%. In the previous quarter, it missed revenue estimates by 14.8%.

Marathon's stock price fell 11.27% during trading hours on Friday.