Despite announcing a strategic Bitcoin purchase plan, Riot Platforms’ shares fell nearly 10%.
Yahoo Finance reported that at the opening of the markets on December 9, the stock miner fell by 7.1%, to $12.03. This was reflected in a wider decline among crypto-related stocks such as Coinbase Marathon Digital and CleanSpark.
This contrasts with the broader crypto market’s upward trend, where Bitcoin’s price rose by 0.33% in the past 24 hours to trade at $99,940 as of press time, according to CryptoSlate’s data. However, Riot’s last price was marked at the close of after-hours trading on Friday, while Bitcoin trades 24/7. Crypto equities are down this morning, partly due to the disparity in prices created over weekend trading.
Bitcoin purchase plans
Riot Platforms intends to raise $500,000,000 through convertible senior notes to finance Bitcoin purchases and corporate needs.
A Dec. 9, 2009 statement stated that the company would privately offer these bonds to institutional investors in accordance with Rule 144A under the 1933 Securities Act. The company will offer buyers a 3-day option for up to 75 million dollars in additional notes.
These notes will be due on January 15, 2030. Riot can redeem all or part of its notes in cash starting January 20, 2028. However, if Riot only partially redeems the notes, at least $50,000,000 must remain outstanding. Upon maturity, noteholders can convert them into Riot’s common stock or a combination of cash and shares.
The company intends to buy additional Bitcoin for its general business purposes.
Meanwhile, this fundraising strategy mirrors moves by Riot’s peers. Marathon Digital recently announced that it would raise $700,000,000 through a private offering. Marathon Digital, like Riot intends to boost its Bitcoin reserves as well as fund corporate initiatives with the proceeds.
Pierre Rochard, the company’s Vice President of Research, highlighted Riot’s capacity to bridge fixed-income investments with Bitcoin’s unique market conditions. He pointed to the firm’s strong operational metrics as a key competitive advantage, including a hashrate of 25 EH/s.
Riot, the third biggest publicly traded Bitcoin corporation, holds 11,425 BTC according to Bitcoin Treasuries.
Meanwhile, the financing strategy of Marathon Digital and other major mining rivals is very similar.
Marathon Digital announced plans earlier this month to raise $700,000,000 through a private offer of convertible senior notes that are due in 2031. The firm stated that this fundraiser would acquire more Bitcoin and support general corporate activities.
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