Marathon Digital Increases Bitcoin Holdings, Acquires Additional 4.1K BTC

In a latest strategic move that has caught the attention of crypto observers, Bitcoin mining firm, Marathon Digital Holdings Inc. (MARA), has increased its investments in Bitcoin with an additional 4,100 BTC. This update comes after the company raised the funds from a $300 million convertible notes offering. Interestingly, the purchase coincides with a notable downtrend in the price of BTC.

Over the last day, the value of Bitcoin has declined by almost 4%, falling below the $60k mark which it struggled to break on August 14 and trading at $58,121. Marathon Digital is one of the world’s largest corporate Bitcoin holders and its latest purchase has helped solidify its position as a top digital asset player.

Marathon Digital Spends $249 Million on Bitcoin

The Florida-based digital asset technology company informed the public in a press release on August 14 that it had increased its Bitcoin reserve, spending $249 million from the proceeds of the convertible notes to buy exactly 4,144 BTC at an average price of $59,500 per Bitcoin. The company disclosed that the total income from the sales of the notes was $292.5 million.

MARA secures $300M through an oversubscribed offering of convertible senior notes. With proceeds, we purchased 4,144 BTC (valued at approx. $249M), boosting our strategic bitcoin reserve to over 25,000 BTC. Learn more: pic.twitter.com/EKwKW6eSny

— MARA (@MARAHoldings) August 14, 2024

Notably, MARA said that it will use the balance from the sales of the notes to purchase more Bitcoin and for other general corporate purposes including working capital, business acquisition, debt repayments, and assets expansion. Following the purchase, MARA now holds a total of 25,000 BTC (worth $1.45 billion with current price), making it the second-largest Bitcoin corporate holder after Microstrategy.

About MARA’s $300 Million Convertible Notes Offerings

Meanwhile, the mining giant said in the release that the offered notes are unsecured, senior obligations of MARA, and come with an interest at a rate of 2.125% per annum. The interest rates are payable in arrears semi-annually on March 1 and September 1 of every year, starting from March 1, 2025.

Furthermore, MARA disclosed that unless there is an earlier purchase, the notes will mature on September 1, 2031, and can be either redeemed or converted into cash or stocks, or both according to the terms.

“Holders of notes may require MARA to repurchase for cash all or any portion of their notes on March 1, 2029 or upon the occurrence of certain events that constitute a fundamental change under the indenture governing the notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the date of repurchase,” the statement reads.

MARA Stock Price Plummets

Following its plans to sell convertible notes, the firm’s stock price came crashing down. On the day, the price dropped by a notable 2.26% to sell at $15.14 according to Google Finance data. Also, the price has plummeted by about 34% over the last year.

Moreover, even though the second-quarter earnings reflect a 9% decline from estimated revenues of $145.1 million, it is still about 78% up from the second quarter of 2023.

Ultimately, MARA stressed that the conversion rate for the notes is 52.9451 shares of MARA’s common stock per $1,000, equivalent to $18.89 per share, however, it is subject to change if any expected or unexpected events occur.