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Bitcoin infrastructure company Riot Platforms has announced its intention to raise $500 million through a private offering of convertible senior notes aimed at institutional investors.
This move comes as Bitcoin approaches its historical peak, with other significant players in the industry making considerable acquisitions at elevated prices.
Riot Platforms Aims for $500M Offering to Support Bitcoin Acquisitions: Key Information for Investors
On Monday, the firm disclosed its proposal for a private offering of $500 million in convertible senior notes maturing in 2030 for qualified institutional investors.
Importantly, the funds generated from this offering will be allocated towards the acquisition of the aforementioned digital asset.
Riot Announces Proposed Private Offering of $500 Million of Convertible Senior Notes.
Net proceeds from this offering to be used primarily to acquire bitcoin and for general corporate purposes.
Link to press release: https://t.co/z7xQaB9eC4.— Riot Platforms, Inc. (@RiotPlatforms) December 9, 2024
The company has also provided the initial purchasers with a 3-day option to acquire up to an additional $75 million of the notes. The offering is contingent upon market conditions, and there is no assurance regarding its completion or terms.
Riot reserves the right to redeem the notes for cash, either in full or in part, starting January 20, 2028. If a partial redemption occurs, a minimum of $50 million in principal must remain outstanding as of the redemption notice date.
The notes may be converted into cash, Riot common stock, or a combination of both at Riot’s discretion.
Conversion will be limited to specific events prior to June 15, 2029, but will be permitted at any time thereafter until two days before maturity. The initial conversion rate and terms will be established during the pricing phase.
Funds from the offering will mainly be utilized for further Bitcoin acquisitions and other corporate purposes. Riot intends to determine the initial conversion price based on its common stock’s U.S. composite volume-weighted average price on the pricing date.
The notes and any convertible shares will not be registered under the Securities Act or other securities regulations. They cannot be publicly traded in the U.S. without appropriate registration or exemptions.
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Riot concluded Q3 with 10,427 BTC, having added 1,104 BTC while not selling any of its holdings. This represented an increase from the 844 BTC mined in Q2.
Competition for Bitcoin Intensifies: How Miners Are Securing Capital Amid Limited Supply and Political Changes
The announcement is in line with a growing trend among Bitcoin miners utilizing convertible bonds to raise funds.
As reported by The Miner Mag, seven publicly traded miners, excluding Riot, have raised $5.2 billion through convertible bonds since June, with 70% of the capital acquired in the four weeks leading up to December 5.
Core Scientific raised $400 million in August, while Marathon Digital secured $1 billion in November. The funds were used for debt management and Bitcoin purchases. Within a week, Marathon acquired 6,474 BTC, increasing its total holdings to 34,797 BTC.
Japanese company Metaplanet also raised $45 million through share sales to fund Bitcoin acquisitions.
This trend aligns with the increasing institutional adoption of Bitcoin, with proponents like MicroStrategy founder Michael Saylor at the forefront.
On December 9, MicroStrategy announced a $2.1 billion purchase of 21,550 BTC at an average price of $98,783 per Bitcoin.
Michael Saylor, co-founder and former CEO of MicroStrategy, has recently conveyed his long-term confidence in Bitcoin.
Saylor stated
“I’m sure I’ll be buying Bitcoin at $1 million a coin.”
Some analysts suggest that the competition for Bitcoin’s limited supply is intensifying, particularly in light of political changes, including the election of pro-Bitcoin U.S. President-elect Donald Trump.
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