TLDR
- Bitfarms priced a $500 million convertible senior notes offering due 2031, up from the originally announced $300 million
- The notes carry a 1.375% interest rate and convert at $6.86 per share, a 30% premium to the October 16 closing price of $5.28
- Initial purchasers have an option to buy an additional $88 million in notes within 13 days
- The company entered capped call transactions with a cap price of $11.88 per share to reduce potential dilution
- Bitfarms stock dropped more than 18% on Thursday following the announcement
Bitfarms Ltd. priced a $500 million convertible senior notes offering on Thursday, increasing the size from the previously announced $300 million. The cryptocurrency mining company revealed the notes will carry a 1.375% interest rate and mature on January 15, 2031.
The notes will convert at an initial rate of 145.6876 common shares per $1,000 principal amount. This equals approximately $6.86 per share, representing a 30% premium to Bitfarms’ closing price of $5.28 on Nasdaq on October 16.
Initial purchasers received an option to buy up to an additional $88 million in notes within a 13-day period. The offering is expected to close around October 21, 2025, subject to customary closing conditions including Toronto Stock Exchange approval.
Bitfarms entered into capped call transactions with financial institutions in connection with the offering. The cap price is initially set at $11.88 per share, a 125% premium to the company’s share price at announcement.
Interest on the notes will be payable semi-annually beginning July 15, 2026. The notes can be repurchased, redeemed or converted before the maturity date.
Dilution Protection Strategy
The capped call transactions are designed to reduce potential dilution to existing shareholders upon conversion. These financial arrangements involve options that offset the dilutive effect of the convertible notes.
The company stated it intends to use the net proceeds for general corporate purposes. The notes and underlying shares have not been registered under the U.S. Securities Act and will be offered only to qualified institutional buyers.
Stock Reaction and Company Operations
Bitfarms stock fell more than 18% on Thursday following the initial announcement of the $300 million offering. The decline came after several sessions of gains, with the stock having surged over 530% in the past six months.
The company operates vertically integrated data centers and energy infrastructure for high-performance computing and Bitcoin mining. Bitfarms has a 1.3 GW energy pipeline that is more than 80% U.S.-based.
The company reported revenue growth of 42% in the last twelve months. Analysts expect Bitfarms to reach profitability this year.
Bitfarms maintains a current ratio of 3.11, indicating strong short-term financial health. The company has been expanding beyond traditional Bitcoin mining into high-performance computing and artificial intelligence data center operations.
The notes offering was described by Bitfarms as an “opportunistic capital raise.” The company previously secured a $300 million project-specific financing facility with Macquarie Group for its data center campus in Panther Creek, Pennsylvania.
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