Marathon Digital Holdings (MARA) Launches $2 Billion at-the-market (ATM) Stock Offering to Fund Bitcoin Acquisitions

Marathon Digital Holdings (MARA) has announced the launch of a $2 billion at-the-market (ATM) stock offering to fund its strategy of acquiring more Bitcoin.

"The company, one of the largest Bitcoin miners in the U.S., said it will sell shares to raise the capital, which will be used mainly to increase its Bitcoin holdings. The move follows the company’s previous successful offering, which raised $1.4 billion to support similar goals.

Marathon Digital (NASDAQ:MARA) announced plans for a $2 billion at-the-market (ATM) stock offering to fund its strategy of acquiring more Bitcoin (BTC).

The company, known for its large-scale Bitcoin mining operations, will be selling shares to raise the capital, with the majority of the proceeds going towards increasing its Bitcoin holdings.

The move follows the company’s successful offering last year, where it sold convertible bonds and stock to raise $1.4 billion, which was also used to buy more Bitcoins and support other initiatives.

The new equity program will see several investment firms, including Barclays and BMO Capital Markets, facilitate the selling of shares. Of the total funds raised, 40% will be allocated to purchasing more Bitcoins, 35% will go towards general corporate purposes, and the remaining 25% will be used for working capital.

This plan to buy more Bitcoins aligns with the firm’s overall objective of establishing a long-term presence in the digital commodities sector.

The new offering comes after a period of expansion of the holding of Bitcoins by the company.

Currently, the company possesses 46,376 BTC, making it the second biggest holder of BTC among the listed firms. This decision is in line with Marathon Digital Hope’s strategy to increase its Bitcoin holdings as it needs more capital following the challenging conditions in the mining industry. Rising energy costs and the recent halving of Bitcoin rewards have made traditional mining operations less profitable.

The company’s approach is similar to that of another major firm, MicroStrategy (NASDAQ:MSTR), which has been actively seeking funds to purchase Bitcoin.

Earlier this year, MicroStrategy announced plans to sell up to $500 million in shares to buy more Bitcoin. MicroStrategy’s CEO, Michael Saylor, has been a strong advocate for companies holding Bitcoin on their balance sheets.

After migrating from the past method of mining and using its own generated bitcoins, Marathon Digital is now buying the bitcoins through issuing of equity offerings and convertible bonds.

As the company is still making solid profits from mining, buying more coins directly in the market creates another channel to expand the company’s offerings.

The company’s past success with Bitcoin acquisition is evident. In 2024, Marathon Digital increased its holdings from 13,726 BTC to the current 46,376 BTC, demonstrating the company’s ability to scale its Bitcoin assets significantly. This aggressive expansion has positioned MARA as a major player in the digital asset space.

Despite the company’s strong performance in scaling its Bitcoin assets and adjusting to the shifting dynamics of the cryptocurrency market, the company’s future performance will be closely tied to the price of the digital currency. Bitcoin’s volatility remains a key factor in the company’s long-term plans as it continues to adjust its strategies for optimal resource management in the evolving crypto landscape.

Moreover, the company’s strong liquidity position is a key aspect of its financial health. With a current ratio of 4.94, the company appears to be well-positioned to meet short-term obligations, which is crucial as it navigates the fluctuating cryptocurrency market. A high current ratio indicates that the company has ample liquid assets to cover its current liabilities, suggesting a lower risk of financial distress.

However, not everyone supports this approach. Renowned economist Peter Schiff has been vocal in his criticism of companies like MARA and MicroStrategy for their strategies of purchasing Bitcoin and adjusting their operations accordingly.

Schiff, a Bitcoin critic, recently dismissed the idea of acquiring Bitcoin as a viable long-term business model, calling those who invest in the cryptocurrency “fools.”