Mara Holdings' $2B Bitcoin Buy
Mara Holdings to Purchase More Bitcoin with $2 Billion Stock Offering
Bitcoin mining company Mara Holdings Inc. (MARA) announced plans to raise up to $2 billion through a stock offering. The funds will be primarily used to purchase additional Bitcoin, a strategy reminiscent of MicroStrategy's approach.
In an 8-K filing and prospectus submitted to the Securities and Exchange Commission on March 28, MARA revealed an at-the-market agreement with investment firms Cantor Fitzgerald and Barclays. This agreement allows for the sale of up to $2 billion of MARA stock over time.
MARA explicitly stated its intention to allocate the net proceeds for "general corporate purposes, including the acquisition of Bitcoin and for working capital."
Following MicroStrategy's Lead
This move closely aligns with the strategy employed by MicroStrategy, the largest publicly-traded corporate Bitcoin holder. MicroStrategy has leveraged various stock offerings to accumulate a substantial Bitcoin reserve, currently holding 506,137 BTC valued at approximately $42.4 billion.
Mara Holdings currently holds 46,374 BTC, worth around $3.9 billion, making it the second-largest holder among public companies (Bitbo data).
Mara's HODL Strategy
In July 2023, Mara Holdings CEO Fred Thiel publicly committed to a "full HODL" strategy. This means the company plans to retain its mined Bitcoin rather than selling it to fund operations, a departure from typical mining practices. Instead, they aim to increase their Bitcoin reserves through acquisitions like this.
Market Impact and Recent Events
The announcement comes after Mara Holdings completed a similar offering last year, raising up to $1.5 billion, and a $1 billion convertible note issuance in November, both primarily used for Bitcoin acquisitions. On March 28th, MARA's stock price closed down 8.58% at $12.47, following reports of Microsoft scaling back data center investments. Overnight trading on March 30th saw a further 4.6% decline to $11.89 (Robinhood data).
At the time of writing, Bitcoin is trading slightly above $28,000.
Disclaimer:
This information is for educational purposes only and should not be considered investment advice. Conduct your own thorough research before making any investment decisions.
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