Bitfarms Announces $300 Million Convertible Note Offering to Boost Bitcoin Mining
Bitfarms Ltd. (ticker: BITF), a leading Bitcoin mining and digital infrastructure company, has announced a convertible note offering aimed at raising $300 million. This financing initiative will allow the notes to be converted into cash or common shares at the company’s discretion. The notes are unsecured and set to mature in 2031, with interest payments starting in July 2026.
Use of Proceeds
The capital raised through this offering will primarily support general corporate purposes. Bitfarms also plans to finance capped call transactions to mitigate the potential dilution from these conversions. The company intends to engage in private agreements with specific note buyers to limit dilution to approximately 125% above the current share price.
Market Reaction
- After the announcement, BITF shares closed up nearly 10% at $6.46.
- However, in after-hours trading, the shares fell by 4.5% due to the news of the offering.
Industry Trends
Recently, many Bitcoin miners have shifted towards convertible note offerings as a means to obtain low-cost financing. This trend facilitates capital acquisition for extensive projects such as high-performance computing (HPC), artificial intelligence (AI), Bitcoin acquisitions, and share buybacks, particularly in a volatile post-halving environment.
Notably, Cipher Mining recently secured $1.1 billion through an upsized convertible note sale, while TeraWulf is pursuing a $3 billion debt offering backed by Google. Convertible notes afford companies the flexibility to attract investors without an immediate impact on their market capitalization.
Management Changes
In a recent strategic move, Bitfarms appointed Jonathan Mir, a veteran banker and energy sector advisor, as the new chief financial officer. The company aims to redomicile in the United States, a decision influenced by increasing revenues and favorable political support for the Bitcoin mining sector.
Recent Moves
Earlier this year, Bitfarms executed a share buyback program, repurchasing 10% of its public float. This action highlights the company’s commitment to enhancing shareholder value amidst its growth strategies.
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