Increased Offering by MARA Holdings
MARA Holdings (MARA) has announced an increase in its planned convertible note offering, raising the amount from $700 million to $850 million due to robust demand from investors. Additionally, the company has expanded the option for initial purchasers to acquire more notes, increasing this from $105 million to $150 million, as detailed in a recent press release. The convertible note offering targets qualified institutional buyers and is scheduled to close on November 20.
No Interest on Convertible Notes
The newly issued convertible notes, which are set to mature on March 1, 2030, will not accrue any regular interest. Instead, these notes can be converted into either cash, shares of MARA’s common stock, or a combination of both, at the company’s discretion. The initial conversion price for these notes is approximately $25.91 per share, which represents a significant premium of 42.5% over MARA’s current stock price of $18.18.
MARA anticipates generating estimated proceeds of $833 million from this offering. A portion of these proceeds, specifically $199 million, is designated for the repurchase of a segment of MARA’s 2026 convertible notes, while the remaining funds will be allocated for several purposes, including Bitcoin acquisitions, asset expansion, and general corporate activities. According to the company, “MARA expects to use approximately $199 million of the net proceeds from the sale of the notes to repurchase $212 million in aggregate principal amount of its existing convertible notes due 2026 (the ‘existing 2026 convertible notes’) in privately negotiated transactions.”
Market Response and Stock Performance
MARA’s strategic move has had an immediate impact on its stock performance. Following the announcement of the increased offering, MARA’s shares experienced a nearly 2% rise in pre-market trading, slightly recovering from a more significant decline of nearly 14% recorded on the previous Monday. Market analysts speculated that the stock drop could have been influenced by the company’s aim to set a low conversion price for investors purchasing the notes.
Competitive Landscape Among Major Bitcoin Holders
The announcement from MARA comes at a time when other significant players in the Bitcoin space, such as MicroStrategy and Metaplanet, are actively expanding their Bitcoin reserves. Recently, MicroStrategy, led by Michael Saylor, disclosed its acquisition of Bitcoin valued at $4.6 billion, with plans to raise an additional $1.75 billion through convertible notes for further Bitcoin purchases. Currently, MicroStrategy holds a staggering 331,200 BTC, acquired at an average price of $88,627, positioning the company favorably with an estimated unrealized profit of around $13.7 billion.
Similarly, Metaplanet has announced an initiative to raise $11.3 million through a third series of ordinary bonds dedicated to Bitcoin acquisitions. The Japanese investment firm is set to issue bonds worth 1.75 billion yen with a modest 0.36% annual interest rate, due for redemption in November 2025. Importantly, while the bonds are not directly collateralized, they are guaranteed by the firm’s director, and the land and building of Hotel Royal Oak Gotanda owned by its subsidiary, Wen Tokyo, serve as security for bondholders.
Corporate Treasurers Embrace Bitcoin Amid Economic Uncertainties
The recent activities of major Bitcoin holders underline a growing trend among corporate treasurers who are increasingly considering Bitcoin as a reserve asset. In light of ongoing macroeconomic uncertainties characterized by rising inflation and geopolitical tensions, many companies are integrating cryptocurrencies into their balance sheets. In response to this trend, digital asset prime services platform Abra has recently launched a service specifically aimed at corporates wanting to hold cryptocurrencies as reserve assets.