Crypto mining firm TeraWulf has announced its intention to offer $350 million in convertible senior notes due 2030, targeting qualified institutional buyers. The proceeds from this offering will be directed towards various corporate purposes.
Based in Maryland, TeraWulf revealed its plans in a press release on October 23, stating that the offering could include an additional $75 million if initial purchasers exercise their option within a 13-day period following the issuance. The company aims to utilize the proceeds for costs associated with capped call transactions, repurchasing shares of its common stock, and general corporate purposes.
The senior unsecured notes will accrue interest payable semi-annually, starting May 1, 2025, with a maturity date set for February 1, 2030. These notes can be converted into cash or a combination of cash and common stock.
Hedging and Market Impact
TeraWulf plans to engage in privately negotiated capped call transactions to mitigate potential dilution from the conversions. The company noted that these hedging activities could influence the stock price during the offering period, affecting the market dynamics for both the convertible notes and the common stock.
Importantly, the convertible notes and any associated shares of common stock are not registered under the Securities Act and are exclusively available to qualified institutional buyers.
Recent Financial Performance
In early August, TeraWulf reported its Q2 financial results, highlighting a 130% increase in revenue year-over-year, despite a decrease in Bitcoin production. The firm’s self-mined Bitcoin fell by 21.4% in Q2, totaling 699 BTC from its Lake Mariner and Nautilus Cryptomine facilities. The decline was attributed to rising mining difficulty and elevated power costs.
