Collapse of MARA after bond offering of 850 million
The post Collapse of MARA after bond offering of 850 million appeared on BitcoinEthereumNews.com. MARA Holdings recorded a stock drop of 4.5% on June 6, 2024, after announcing a massive convertible bond offering for 850 million dollars, leaving the markets in shock over the scale of the operation and the future of the company’s shares. What does the offering of convertible bonds by MARA mean? The announcement concerns a proposal for the issuance of senior convertible bonds with zero coupon, intended exclusively for qualified institutional investors according to Rule 144A of the U.S. Securities Act. The maturity is set for August 1, 2032, but the bonds may be redeemed, repurchased, or converted before that date. MARA also offers buyers the opportunity to purchase up to 150 million dollars additional in bonds, within 13 days from the issuance date. These are unsecured and without regular interest: the principal amount, in fact, will not grow over time. The convertible feature allows the bonds to be converted into cash, MARA common stock, or a combination, according to the company’s choice. The immediate effect was a loss of value on the stock exchange of 4.5%. The main reason was the risk of share dilution. When a company issues new convertible bonds, there is a real possibility that, at the time of conversion, new shares will be introduced to the market, thereby reducing the percentage value for existing shareholders. MARA, aware of the criticality, has simultaneously announced the initiation of capped call transactions. These privately conducted operations are intended to limit the dilutive impact on common shares in the event the conversion is exercised. The capped calls usually involve the purchase of derivatives: consequently, the counterparties might purchase MARA shares on the market or enter into contracts that influence the stock price. The use of funds has been divided into three main directions: Up to 50 million dollars: allocated…
The post Collapse of MARA after bond offering of 850 million appeared on BitcoinEthereumNews.com.
MARA Holdings recorded a stock drop of 4.5% on June 6, 2024, after announcing a massive convertible bond offering for 850 million dollars, leaving the markets in shock over the scale of the operation and the future of the company’s shares. What does the offering of convertible bonds by MARA mean? The announcement concerns a proposal for the issuance of senior convertible bonds with zero coupon, intended exclusively for qualified institutional investors according to Rule 144A of the U.S. Securities Act. The maturity is set for August 1, 2032, but the bonds may be redeemed, repurchased, or converted before that date. MARA also offers buyers the opportunity to purchase up to 150 million dollars additional in bonds, within 13 days from the issuance date. These are unsecured and without regular interest: the principal amount, in fact, will not grow over time. The convertible feature allows the bonds to be converted into cash, MARA common stock, or a combination, according to the company’s choice. The immediate effect was a loss of value on the stock exchange of 4.5%. The main reason was the risk of share dilution. When a company issues new convertible bonds, there is a real possibility that, at the time of conversion, new shares will be introduced to the market, thereby reducing the percentage value for existing shareholders. MARA, aware of the criticality, has simultaneously announced the initiation of capped call transactions. These privately conducted operations are intended to limit the dilutive impact on common shares in the event the conversion is exercised. The capped calls usually involve the purchase of derivatives: consequently, the counterparties might purchase MARA shares on the market or enter into contracts that influence the stock price. The use of funds has been divided into three main directions: Up to 50 million dollars: allocated…
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