MARA Boosts BTC Holdings to $3.3 Billion Through $1B Convertible Note Offering

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As a seasoned crypto investor with a keen eye for strategic moves, I find MARA’s recent Bitcoin buying spree quite intriguing. The company’s approach to funding Bitcoin acquisitions through convertible notes, much like MicroStrategy, resembles a game of high-stakes poker where the pot just got bigger.

MARA, formerly Marathon Digital, has announced the purchase of an additional 703 BTC.

Just recently, this new move continues a trend that started with the acquisition of 5,771 Bitcoins (BTC) on November 23, which increased their Bitcoin holdings to 6,474 BTC, following a $1 billion convertible note offering.

MARA’s BTC Holdings

As stated in a post on November 27th, each transaction was completed with an average price of about $95,395 per coin for MARA. Now, their total Bitcoin holdings amount to roughly 34,797 Bitcoins, which is equivalent to around $3.3 billion in value.

Following deductions for transaction expenses, the mining firm retains around $160 million to buy Bitcoins when prices drop. Additionally, they mentioned they bought back some of their 2026 bonds for approximately $200 million.

Following the successful completion of a $1 billion offering of 0% convertible senior notes maturing in 2030 last week, the company has announced that it plans to allocate around $199 million from these proceeds towards repurchasing its existing convertible notes due in 2026. The remaining funds will be earmarked for additional Bitcoin purchases and general corporate expenses.

Additionally, it was disclosed that they intend to sell an extra $700 million worth of convertible senior notes in a private deal to eligible institutional investors. The proceeds from this sale will go towards buying back some 2026 notes and financing more purchases of Bitcoins.

Based on Google Finance statistics, the company’s shares ended the day up by 7.81%, closing at $26.92 on November 28th. Over the past month, MARA has experienced a significant rise in its stock value, with an increase of approximately 42.13%. So far this year, the company has seen a growth of 17.4%. Additionally, it currently holds a market capitalization of $9 billion.

Parallels and Risks in Bitcoin Buying Strategy

MARA, like MicroStrategy, chooses to finance its Bitcoin purchases with convertible notes, a method akin to using corporate debt to accumulate Bitcoin since the year 2020.

As a researcher, I’m sharing an update about MicroStrategy’s latest strategic move. They’ve issued senior convertible notes worth $3 billion with zero interest rate, which they then utilized to purchase more Bitcoin. Over the period of November 18 to 24, this business intelligence company added 55,000 Bitcoin to their holdings at an average price of approximately $97,862 per coin. This brings their total Bitcoin investments up to a staggering 386,700 Bitcoin.

Despite pouring a large amount of money into cryptocurrency, the company’s stocks have experienced dramatic ups and downs. During the week between November 21st and 27th, when Bitcoin’s price dipped, the company’s shares dropped by 35%, from a high of $535 to as low as $340 before bouncing back to $353.

Critics claim that MicroStrategy’s method of borrowing to buy Bitcoin is potentially hazardous and not long-term viable, particularly if the value of Bitcoin falls. Yet, since MicroStrategy doesn’t have to repay its debt until 2028, it has a considerable amount of time to handle temporary market slumps and fluctuations in the short term.

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2024-11-28 22:26