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Bitcoin Mining giant Cleanspark announced a round of capital raising through the issuance of debt. Particularly, the firm emulates its rivals MARA and RIOT in the private issuance of convertible notes for select investors. However, with these funds the company will not purchase Bitcoin.
Basically, the capital obtained will be injected for other purposes. This is a decision that contrasts with its rivals, which announced massive purchases of the leading Cryptocurrency to add them to their reserves. This strategy, mainly promoted by MicroStrategy, has the vision that the price of BTC will appreciate permanently.
In that sense, sheltering corporate capital in other assets such as the dollar or Treasury bonds is similar to throwing them away. Unlike these assets, companies can preserve BTC for thousands of years without it suffering any type of wear and tear related to assets composed of matter.
With this ideology in mind, the number of companies converting to the Bitcoin pattern continues to constantly grow. However, for now Cleanspark seems not to be one of them. The fact that the company will not buy Bitcoin does not mean that its management distrusts the currency. The reason is that the firm has more pressing financial matters.
Why Cleanspark Won’t Buy Bitcoin?
The fact that Cleanspark is moving from the Bitcoin model is due to the fact that the capital to be raised already has a destination. According to the company, in total the mining company will raise $550 million dollars with the issue. It is worth mentioning that the convertible notes are 0% and mature in 2030.
Some details of interest imply that the company will cap the prices of the notes at $24.66 per share. This represents a 100% premium over the December 12 closing price. But probably the most attractive measure is that the firm could give up to 13 days to repurchase up to $100 million principal amount of the notes.
Should investors take advantage of this offering, the company could raise a total of $633 million. On the other hand, the company reported that $145 million of the capital raised will be used to repurchase shares from investors who participated in this fundraising.
Another portion of the funds will go toward paying off your line of credit with Coinbase. The remainder will be allocated to capital expenditures, equipment purchases and other various corporate expenses, according to the mining company’s report.
The decision that the company will not purchase additional Bitcoin for its reserves can be considered surprising. The latter, considering that their direct rivals, Marathon and Riot, also issued notes to raise approximately $500 million each and the destination of those funds is the purchase of BTC.
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