Marathon Digital raises $250M to increase bitcoin holdings, but stock falls over dilution concerns.

From Nasdaq
August 13, 2024 02:36am:

Bitcoin miner Marathon Digital (MARA) plans to raise $250 million through a private offering of convertible notes. The company will use the funds to increase its bitcoin holdings. However, MARA stock fell over 11% on investor concerns about the dilution effect on existing shareholders.

The convertible notes, with a 2031 maturity date, will be offered to institutional investors who can convert into cash, MARA common stock, or a mix of both.

Marathon Digital recently acquired $100 million worth of bitcoin, bringing their total holding to over 20,800 bitcoins, valued at approximately $1.28 billion.

Other companies like MicroStrategy and Tesla are also increasing their bitcoin holdings. The recent industry trend has seen mining companies doubling down on accumulating bitcoin, especially after recent market downturns and the reduction in mining rewards.

Analysts have a Hold consensus rating on MARA, with a current price target of $21.17 suggesting a 40.1% upside potential. While the company is capitalizing on the cryptocurrency to boost financial standing, weaker-than-expected Q2 results have affected stock performance.

Read more at Nasdaq: Marathon Digital (MARA) Raises $250M to Bolster Bitcoin Holdings