As a seasoned researcher with over two decades of experience in the financial sector, I find Mara Holdings’ recent move to issue $1 billion in convertible senior notes for Bitcoin acquisition intriguing. Having closely followed MicroStrategy’s similar strategy, it seems that the market is increasingly viewing Bitcoin as a viable asset class for institutional investment.
Mara Holdings, a business specializing in cryptocurrency mining and blockchain technology, recently finished selling $1 billion worth of non-interest bearing bonds, known as zero-coupon convertible senior notes, that will mature on March 1, 2030. The company intends to primarily utilize the funds obtained for purchasing Bitcoin.
144A Securities issued to institutional investors have a conversion price set at a level noticeably above Mara’s current stock worth. These securities become eligible for redemption, under advantageous terms, starting from the year 2028.
As a crypto investor, I’m planning to allocate roughly 20% of our total funds, which amounts to around $199 million, towards meeting our forthcoming debt commitments. The rest of the funds will be utilized for strategic investments, fostering operational growth, and purchasing Bitcoin (BTC).
The progress mirrors MicroStrategy’s recent strategy, as it boosted its bond sales to a staggering $2.6 billion for Bitcoin acquisitions, thereby strengthening faith in Bitcoin’s capacity to soar up to $100,000.
Debt repurchase and BTC acquisition
As stated in their formal announcement, the company intends to use $199 million out of a total $980 million they’ve raised, to buy back $212 million worth of their convertible notes that mature in 2026.
The leftover resources will be directed towards strategic investments, including strengthening our working capital, and potentially purchasing more Bitcoin.
Each newly issued share has an opening value of around $25.91, representing a 42.5% increase above the typical pre-offering trade price.
Trump’s presidency to boost BTC mining
As a crypto enthusiast attending the Bitcoin 2024 conference in Nashville last July, I found myself buoyed by Fred Thiel’s forward-looking sentiment about Bitcoin mining. Mara’s charismatic chairman and CEO expressed his confidence in the bright prospects of Bitcoin mining, leaving me feeling optimistic about the future of this revolutionary digital currency.
Thiel stated that under a Trump presidency, he anticipates the Bitcoin mining sector will thrive, setting it apart from his belief that under a Harris administration, there might be uncertainty regarding their energy policies.
Ever since Donald Trump’s election win on November 5th, Peter Thiel’s excitement towards the sector’s expansion seems parallel to Mara’s strategy of investing in Bitcoin purchases.
MARA Q3 earnings miss triggers 9% dip
Mara’s third-quarter profits, published on November 12th, showed a loss of $0.34 per share, which was just slightly more than what experts had predicted. As a result, there was a 9.1% drop in trading after hours.
Although there was a decrease in expectations, the company still managed a significant growth of 34.5% in annual revenues, reaching an impressive total of $131.6 million. Unfortunately, this figure was lower than the projected $148.1 million by financial analysts.
On November 11th, Mara’s shares experienced a 30% increase as Bitcoin approached $90,000, boosting the company’s share price by 10% since the beginning of the year.
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2024-11-21 17:36