Riot Platforms completes convertible bond offering, raising $594M to buy 667 BTC

Riot Platforms announced today that it had completed its offering of the 0.75% convertible senior notes due 2030 to raise $594.4M. The Bitcoin miner used the additional proceeds from its coupon-convertible bond issue to acquire 667 BTC at $101,135 per token, bringing its total BTC holding to 17,429 BTC. 

Riot generated a BTC Yield Per Share of 37.2% YTD and 36.7% QTD through the recent Bitcoin acquisition and mining production YTD. Its total Bitcoin holding is currently worth $1.8B at the average market price of $103,873.

Riot Platforms closes convertible senior notes offering

With the additional proceeds from Riot’s upsized $594 million, 0.75% coupon convertible bond issue, the Company has acquired 667 BTC at an average price of $101,135 per BTC. As a result, Riot has increased its holdings to 17,429 BTC, currently valued at $1.8 billion based on the… pic.twitter.com/t68Uy8nbHU

— Riot Platforms, Inc. (@RiotPlatforms) December 16, 2024

According to Riot Platforms, the aggregate principal amount of the 2030 Notes sold in the offering included $69.4 million relating to the partial exercise of the initial purchasers’ option. The net proceeds from the issuance of the 2030 Notes were approximately $579.2 million after deducting the initial purchasers’ discounts, commissions, and estimated offering expenses payable by Riot. 

The Bitcoin miner disclosed that the 2030 Notes were sold in a private offering only to persons reasonably deemed qualified institutional buyers per the Securities Act. All the net proceeds were swiftly deployed to additional Bitcoin acquisition.

According to Stock Titan, successfully completing the convertible notes offering represented a huge capital raise for Riot. The convertible structure provided flexibility for future equity conversion while minimizing immediate dilution. Investors should, however, note that the substantial BTC acquisition exposed Riot to increased crypto volatility, although the low interest rate indicated favorable market conditions. The 2030 maturity period also provided a lengthy runway for the company’s growth strategy.

Riot’s capital raise marked one of the most significant fundraising events recently in the crypto mining sector. It signalled strong institutional confidence in the company’s business model and demonstrated Riot’s commitment to future operational expansion.

Riot Platforms doubles down on Bitcoin with substantial additional acquisition

On December 9th, Riot announced its intention to use all proceeds from the offering to purchase more Bitcoin, and it carried through with its plan by acquiring 667 BTC on December 16th. The company had already used a portion of the offering net proceeds to accumulate over 5K BTC between December 10th and 12th. 

Riot Platforms increased its BTC holding to 17,429, suggesting plans to expand its Bitcoin reserve significantly and potentially impacting its financial strategy. The Bitcoin mining company acquired and held Bitcoin to enhance stockholder value. Riot reported its BTC Yield KPI indicating a quarter-to-date Yield of 36.7% and a year-to-date Yield of 37.2%. 

According to Riot Platforms, the BTC Yield KPI could only be used by pro-level investors to supplement their understanding of the company’s decision to fund the purchase of Bitcoin by issuing additional shares of its common stock. Riot emphasized that the BTC Yield KPI was not equivalent to ‘yield’ in the traditional financial context since it could not be used as an operating performance or liquidity measure. 

InvestingPro analysts anticipated that the recent BTC acquisitions would push Riot’s revenue growth to 32% in 2024. InvestingPro data further showed that the company maintained a strong balance sheet with more cash than debt and a healthy current ratio of 5.86x. Recent stock performance was also strong, with a 16% return over the past week and 23% over six months.

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