Marathon Digital has announced plans to raise $750 million through a hybrid equity offering. The company will use the proceeds to invest in new mining equipment and increase its operational capacity.
The Bitcoin mining company has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a hybrid equity offering.
The company intends to raise up to $750 million by issuing common or preferred stock, as well as warrants or units.
According to the filing, Marathon Digital will use the net proceeds from the offering for general corporate purposes, which may include investments in new mining equipment and expanding its operational capacity.
The company said:
“We intend to use the net proceeds from this offering for general corporate purposes, which may include, among other things, working capital, capital expenditures, potential acquisitions, and strategic transactions.”
Marathon Digital currently operates over 23,000 Bitcoin miners at its facilities in Montana and Texas, with a total hash rate of 2.4 exahashes per second (EH/s).
The company also has orders for more than 100,000 miners from Bitmain, which are expected to be delivered and deployed by the end of 2023.
Once fully operational, these miners will increase Marathon Digital’s hash rate to over 13.3 EH/s, making it one of the world’s most powerful Bitcoin mining companies.
Benefiting from the Bitcoin price rally
Marathon Digital’s announcement comes amid a strong price rally in Bitcoin, which has surged over 100% this year in 2023.
The company has been accumulating Bitcoin since January 2021, when it announced that it would no longer sell any of its mined Bitcoins.
As of September 30, 2023, the company held 13,726 Bitcoins on its balance sheet, worth over $480 million at current prices. The company also reported producing over 1,000 Bitcoins monthly as of October 2023.
Marathon Digital’s stock price has also benefited from the Bitcoin price rally, as well as its impressive operational and financial performance.
The company’s shares have soared by 164% this year as of the current price of $9. However, the stock is still trading at a 50% discount from its peak of $19 in July 2023.
Marathon Digital is expected to release its third-quarter earnings report next month in November 2023. In the second quarter of 2023, the company reported a threefold surge in revenue, reaching over $80 million.
The company also narrowed its losses during the last quarter and expects to improve its profitability further.
Marathon strategy to sell their Bitcoin holdings
With the rise in the Bitcoin price this year, some Bitcoin miners have been selling their holdings to take profits or cover their costs.
According to data from CryptoQuant, a blockchain analytics platform, the miner net position change indicator shows that miners have been selling more Bitcoins than they have been mining since September 2023.
This could indicate that miners are taking advantage of the high prices or facing cash flow issues.
However, Marathon Digital has yet to follow this trend and has continued to hold its Bitcoins. The company believes that Bitcoin is undervalued and has a long-term bullish outlook.
The company said:
“We believe bitcoin is undervalued relative to its potential utility as an alternative store of value and medium of exchange that is not subject to central bank manipulation or political interference.”
