Key Points
- TeraWulf, a Bitcoin mining firm, plans to offer $350 million in convertible senior notes due 2030 to institutional buyers.
- The proceeds will be used for corporate purposes, including repurchasing company shares and covering the cost of capped call transactions.
Bitcoin mining company TeraWulf, based in Maryland, has revealed its plan to offer $350 million in convertible senior notes due 2030 to qualified institutional investors, depending on market conditions.
Details of the Offering
The company’s announcement, made on October 23, indicated that an additional $75 million may be included in the offering if initial buyers exercise their option within a 13-day window after issuance.
The funds raised will be used to cover the cost of capped call transactions, to buy back shares of the company’s common stock, and for other general corporate purposes.
The senior unsecured obligations will begin accruing semi-annual interest from May 1, 2025, and are set to mature on February 1, 2030. These notes can be converted into cash or a combination of cash and common stock.
Hedging Activities and Stock Market Impact
TeraWulf aims to undertake privately negotiated capped call transactions to minimize potential dilution from conversions. The company acknowledges that these hedging activities may affect the stock price during the offering period, which could impact the market for both the convertible notes and common stock.
The company also clarified that the convertible notes and any related shares of common stock are not registered under the Securities Act and can only be offered to qualified institutional buyers.
In early August, TeraWulf reported its Q2 financial results, which showed a 130% increase in revenue year-over-year despite a decrease in Bitcoin production. The company’s self-mined Bitcoin in Q2 dropped by 21.4%, amounting to 699 BTC across its Lake Mariner and Nautilus Cryptomine facilities. The company attributed this decrease to increased mining difficulty and higher power costs.