Crypto miner Marathon Digital Holdings borrows $ 500 million to buy Bitcoin | Currency News | Financial and business news

Ozan Kose / Getty Images

• Marathon Digital plans to sell $ 500 million worth of convertible bonds and some of the proceeds will be used to buy bitcoin.
• The crypto miner separately said the SEC had asked him for information about a data center in Montana.
• Marathon Digital’s stock fell as much as 16% during Monday’s session.

Marathon Digital announced on Monday that it would sell hundreds of millions of dollars in debt and use some of the funds raised to buy Bitcoin.

Shares fell and the pressure came after the cryptocurrency miner announced it had received a government subpoena regarding a data center.

Marathon Digital plans to offer qualified institutional buyers $ 500 million in convertible bonds due in 2026, a statement said in a statement. First-time buyers have the option to purchase an additional $ 75 million in face value of notes and investors may convert the notes into common stock in certain circumstances and during certain time periods, Marathon Digital said.

Given potential dilution, investors pushed the stock 17% down to as low as $ 62.71. More than 16 million shares were exchanged, an above-average daily volume of 11 million shares.

“Marathon intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin or bitcoin mining machines,” it said. The interest rate, initial conversion rate and other conditions related to the bond sale will be determined at the price of the offering.

Bitcoin was up 0.7% at $ 64,062 during Monday’s session. Its price more than doubled in 2021, hitting record highs of over $ 67,000 and surpassing a valuation of over $ 1 trillion.

Separately, the company announced that it and some of its executives received a subpoena in the quarter ended September 30th to prepare documents and communications from a data center in Hardin, Montana.

Marathon Digital announced in October 2020 that it had entered into a series of agreements with several parties to design and build a data center for up to 100 megawatts in Hardin.

“We are aware that the SEC may be investigating whether there may have been violations of the Federal Securities Act or not,” said a 10-Q filing with the SEC. “We’re cooperating with the SEC.”

Marathon Digital stocks are up more than 500% in 2021.