Why Bitfarms Stock Got Thrashed Today
Key Points
The Bitcoin miner is tapping investors for more financing.
It's planning to float a new issue of convertible senior notes.
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Like the cryptocurrency world it's part of, Bitfarms (NASDAQ: BITF) stock can be rather volatile. Recent trading sessions have highlighted this up-and-down nature, and unfortunately for the Bitcoin miner and (increasingly) data center company, Thursday was one of the down ones.
Following a fairly vigorous rally over several preceding sessions, the stock did an about-face with a more than 18% decline that day. Investors clearly weren't happy about the company's latest financing news.
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A $300 million move
After market close on Wednesday, Bitfarms revealed that it aims to issue $300 million worth of convertible senior notes. These securities will mature in 2031 and pay interest semiannually if not converted before then.
Image source: Getty Images.
The company said that the securities will be convertible into shares of its common stock, cash, or a combination of the two at its discretion. Bitfarms has not yet determined the interest rates the notes will pay, the details of the conversion process, or other features of the securities.
It did add that it intends to grant the initial purchasers of the notes a collective 13-day option to buy an additional $60 million worth.
Not exactly sold on the idea
In its press release announcing the eventual notes issue, Bitfarms said that it represented an "opportunistic capital raise for general corporate purposes." However, $300 million-plus is a large number for any company, and it's apparent some investors wanted more compelling reasons for this one to take such an action.
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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
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