Bitcoin miner TeraWulf seeks $350m in convertible notes for stock buybacks

Crypto mining firm TeraWulf plans to offer $350 million in convertible senior notes due 2030 to qualified institutional buyers, with proceeds aimed at corporate purposes.

Maryland-headquartered Bitcoin (BTC) mining firm TeraWulf announced its intention to offer $350 million in convertible senior notes due 2030 in a private placement aimed at qualified institutional buyers, contingent on market conditions.

In a Wednesday press release, on Oct. 23, the firm said the offering may include an additional $75 million if initial purchasers exercise their option within a 13-day window post-issuance. The company plans to use the proceeds “to pay the cost of the capped call transactions, to repurchase shares of the company’s common stock and for general corporate purposes.”

These senior unsecured obligations will accrue interest payable semi-annually starting May 1, 2025, with maturity set for Feb. 1, 2030. The notes can be converted into cash or a combination of cash and common, the press release reads.

TeraWulf plans to engage in privately negotiated capped call transactions to reduce potential dilution from conversions. These hedging activities could impact the stock price during the offering period, affecting the market for both the convertible notes and common stock, TeraWulf noted.

The firm added that the convertible notes and any related shares of common stock are not registered under the Securities Act and can only be offered to qualified institutional buyers.

In early August, TeraWulf unveiled its Q2 financial results, showcasing a 130% increase in revenue year-over-year despite a decline in Bitcoin production. The firm’s self-mined Bitcoin in Q2 decreased by 21.4%, totaling 699  BTC across its Lake Mariner and Nautilus Cryptomine facilities, which the company attributed to increased mining difficulty and elevated power costs.