Why TeraWulf Stock Leaped More Than 10% Higher on Tuesday
Key Points
The Bitcoin miner and data center owner is going to the well for over $3.2 billion in new financing.
It's floating an issue of senior secured notes.
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TeraWulf (NASDAQ: WULF), one of the numerous Bitcoin miners eagerly pursuing new revenue streams, was an investor favorite on the second trading day of the week. The company's shares enjoyed an over 10% rise that trading day thanks to some news on the financing front and an analyst's fresh price-target increase.
Seeking Over $3 billion
Before the stock market opened for trading that day, TeraWulf announced that its subsidiary Wulf Compute aims to float $3.2 billion aggregate principal amount of senior secured notes. These debt securities mature in 2030 and are to be sold in a private offering to institutional buyers. The company hasn't yet disclosed the interest the notes will pay.
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In its press release on the issue, TeraWulf said it intends to use the net proceeds of the flotation to help finance the expansion of its data center in upstate New York.
Separately, Compass Point analyst Michael Donovan raised his price target on TeraWulf that morning. The increase was considerable as Donovan more than doubled his fair value assessment on the stock to $17 per share from his former $6.50. He maintained his buy recommendation for the shares.
Join the club
Although details were sparse regarding Donovan's significant change, it's part of a recent trend among professional TeraWulf watchers. In fact, earlier that morning Lucid Capital Markets became the latest researcher to track the company, initiating coverage on it with a buy recommendation and price target of $25 per share.
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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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