CleanSpark raises $1.15B to repurchase shares and fund projects

CleanSpark, a large Bitcoin mining company in the United States, has announced via a press release on Monday that it intends to offer $1.15 billion in aggregate principal amount of convertible senior notes to qualified institutional buyers under Rule 144A of the U.S. Securities Act.

The notes will mature on February 15, 2032, unless earlier repurchased, redeemed, or converted, and will be senior unsecured obligations of the company.

CleanSpark also granted initial purchasers an option to buy up to an additional $200 million of the securities within 13 days of issuance. The company, however, added that the offering remains subject to market conditions, with no guarantee as to timing or final terms.

CleanSpark raises funds to repurchase shares and fund projects

The company’s offering of $1.15 billion in convertible notes comes with an initial conversion premium of approximately 27.5%. ClearSpark said it plans to use around $460 million of the net proceeds to repurchase shares of its common stock from investors participating in the offering.

The remaining proceeds will be directed toward the expansion of the company’s power and land portfolio, data center infrastructure development, repayment of Bitcoin-backed lines of credit, and other general corporate purposes.

The company also added that the notes will not bear regular interest and the principal amount will not accrete. Investors will have the option to convert the notes into cash, CleanSpark common stock, or a combination of both, at the company’s discretion. The initial conversion rate and pricing details will be finalized during negotiations with the initial purchasers.

CleanSpark shares fell by about 5% in after-hours trading following the announcement.

Bitcoin miners chase the AI data center boost

CleanSpark’s new $1.15 billion shows its intent to expand and diversify its infrastructure into data center operations, less than a year after a $650 million convertible note issuance due 2030 in December 2024.

CleanSpark said part of the proceeds would help boost its data center development pipeline, reflecting an industry trend among miners seeking to repurpose or co-locate assets for high-performance computing workloads.

The company, like many Bitcoin miners, has been pivoting more towards high-performance computing (HPC) services since last year, thanks to the artificial intelligence (AI) boom and dwindling revenue from mining.

Last month, the company brought in industry veteran Jeffrey Thomas as its senior vice president of AI Data Centers, signaling its seriousness to play in the AI data center and HPC space. It has also marked Georgia as a strategic region for its AI expansion, as it already has real estate and power assets in the state.

Join a premium crypto trading community free for 30 days - normally $100/mo.