Bitcoin mining company CleanSpark announced plans Monday to offer $1 billion in convertible senior notes, then upsized the offering to $1.15 billion late last night. A further $150 million worth of shares may also be offered, the company said late Monday.
The market response has been much the same following both announcements, with shares of CLSK continuing to fall for a second straight day. CLSK was recently priced at $13.86, per data from Yahoo Finance, down nearly 8% on the day and extending its five-day slide to more than 14%. Broadly, the Nasdaq was down about 0.5% on Tuesday.
The company plans to allocate approximately $460 million of the net proceeds to repurchase its common stock from convertible note investors through privately negotiated transactions. The firm has agreed to repurchase stock at a price of $15.03 per share, or Monday’s closing price.
The remaining funds will support expanding CleanSpark’s power and land portfolio, developing data center infrastructure, repaying Bitcoin-backed credit lines, and will otherwise be used for general corporate purposes.
The convertible notes can be converted into cash, stock, or both at the company’s choice. The initial conversion rate is 52.1832 shares per $1,000 note, equating to $19.16 per share—a 27.5% premium over Monday’s closing price. The rate adjusts under certain circumstances.
The convertible notes will be senior unsecured obligations that don’t bear regular interest and won’t accrete in principal value. They mature on February 15, 2032, unless earlier repurchased, redeemed, or converted. Conversion will be restricted until August 15, 2031, allowed only under certain conditions, but afterward convertible anytime until two trading days before maturity.
Bitcoin was recently priced at $103,337, up about 2% on the week following a recent rough patch for crypto markets, with the coin still showing a nearly 10% dive over the past 30 days. The leading cryptocurrency by market cap has fallen 18% since hitting a new all-time high mark above $126,000 in early October.
Other publicly traded Bitcoin miners like Riot Platforms and Cipher Mining have also fallen on the day, down about 6% each, with Terawulf dropping by more than 10% so far Tuesday.