Marathon Digital, a prominent player in the Bitcoin mining sector, has recently invested $249 million in Bitcoin after successfully raising $300 million through a senior note offering. On August 14, the company announced that it used a portion of the funds obtained from the note sale to acquire approximately 4,144 Bitcoin at an average price of about $59,500 per BTC. This latest acquisition has boosted Marathon’s strategic Bitcoin reserve to over 25,000 BTC.
The offering of convertible senior notes, which will mature in September 2031 and carry an annual interest rate of 2.125%, resulted in net proceeds of around $292.5 million for the company. These notes can be converted into cash or shares of Marathon stock, providing the company with flexible financing options. The remaining funds from the offering are expected to be utilized for further Bitcoin acquisitions and general corporate activities, which could include strategic expansions.
In July, Marathon had already bolstered its Bitcoin reserves by acquiring 2,282 BTC valued at roughly $124 million, aligning with its long-term strategy to hold Bitcoin as a treasury asset. This approach aims to enhance the company’s asset base amid ongoing market volatility in cryptocurrency.
Despite these investments, Marathon’s stock performance has faced challenges, closing down 2.26% at $15.14 on the day of the announcement. Year-to-date, the stock price has experienced a significant drop of nearly 34%.
Additionally, Marathon’s second-quarter earnings fell short of Wall Street expectations, with revenues coming in 9% below the anticipated $145.1 million, even though this reflects a substantial increase of 78% compared to the same quarter in 2023. The backdrop for these results is a challenging environment for Bitcoin mining, marked by record low profitability following the recent Bitcoin halving, which has led to decreased mining rewards and made it increasingly difficult for miners, including Marathon, to maintain profitability.
