On Wednesday, shares of MARA Holdings (MARA) are seeing a decline, dropping by approximately 13.8% at the time of 2:58 p.m. Eastern Time. This decrease occurs amidst a positive trend for the S&P 500 and Nasdaq Composite, which have both risen by 0.7% and 0.5% respectively.
Today, the Bitcoin mining company’s shares are decreasing following their announcement of a private fundraising worth $850 million. This move has ignited concerns about potential share dilution among investors.
MARA’s financial move
The business has revealed its plans to launch a $850 million private sale using convertible notes, which will mature in the year 2032. Initial buyers could potentially have the opportunity to purchase an additional $150 million in these notes. These obligations are unsecured senior debts and won’t accrue regular interest.
Primarily, the funds are earmarked for purchasing Bitcoin, maintaining day-to-day operations, and executing capped call transactions – a strategic financial move aimed at minimizing stock dilution. However, there may still be some degree of dilution, which has caused concern among investors today, resulting in a significant sell-off.
MARA is highly dependent on Bitcoin
MARA’s profitability heavily relies on the fluctuations of Bitcoin’s price and the expenses associated with energy consumption. These factors pose significant challenges for investors, and I believe that energy costs will continue to be a major issue in the future. The rapidly increasing energy requirements from the AI sector are substantial, escalating, and will maintain high energy prices, thereby influencing MARA’s Bitcoin mining costs.
While it’s true that owning a miner’s stock theoretically has some benefits compared to buying Bitcoin directly, my personal view is that in practical terms, the risks are significantly greater. Therefore, I recommend staying away from the stock.
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2025-07-23 23:32