MARA Holdings is launching a new $2 billion at-the-market (ATM) stock offering to raise funds to buy more bitcoin and support its corporate operations. This is in line with MARA’s long-term strategy of selling stock to buy more bitcoin.
The company has partnered with major financial institutions including Barclays Capital Inc., BMO Capital Markets Corp., BTIG and Cantor Fitzgerald to facilitate the stock sale.
The shares will be sold from time to time at MARA Holdings’ discretion and the agents will get a commission of up to 3% of the total gross proceeds from each sale.
MARA Holdings is taking an approach similar to Strategy’s Michael Saylor who has been using equity and convertible bond offerings to buy bitcoin.
MARA currently holds 46,374 BTC, making it the second largest bitcoin treasury among publicly traded companies, just behind Strategy’s 506,137 BTC holdings.
The company had an ATM stock offering of up to $1.5 billion which was launched in October 2023. That has now been terminated in favor of this new $2 billion offering.
According to the company’s SEC filing, MARA will use the funds “for general corporate purposes, including the acquisition of bitcoin and for working capital.”
Despite being a bitcoin mining company, MARA has been increasingly buying bitcoin from the open market rather than solely depending on its mining operations.
This is due to the challenges miners have faced since the last Bitcoin halving which reduced mining rewards by 50%.
Related: Immediate and Long-Term Effects of Bitcoin’s Fourth Halving
The halving and the increasing network difficulty have reduced profits for miners.
Rising operational costs including higher electricity prices and equipment expenses have also made it harder to mine bitcoin at a discount to its market price. As a result, buying bitcoin directly from the market has become a more attractive option for MARA Holdings.
MARA Holdings has stated that it remains in a strong liquidity position, and with a $4.7 billion market cap, MARA is confident this stock offering can help boost its reserve and expand its operations.
The news has gotten attention from analysts, with Rosenblatt Securities starting coverage on MARA Holdings with a “Buy” rating and $19 price target.
Piper Sandler has also kept an “Overweight” rating on MARA and raised the price target to $30, citing MARA’s leadership in bitcoin mining and ability to adapt to the market.
MARA is raising funds through stock offerings instead of relying solely on mining. Meanwhile, some miners are exploring other revenue sources such as high-performance computing and artificial intelligence (AI) operations.
Besides adding to its bitcoin holdings, MARA Holdings is working on new infrastructure projects. The company is almost done with a 40-megawatt data center in Ohio which will increase its mining capacity.
