Marathon Digital is one of the largest bitcoin mining firms in North America.

Marathon Digital (NASDAQ: MARA) announced today plans to offer convertible senior notes amounting $500 million to qualified institutional buyers in a private offering. The crypto mining company said it intended to use the net proceeds from the offering for corporate purposes including to acquire bitcoin, or bitcoin mining machines.

The notes will be due 2026 and will accrue interest payable semi-annually in arrears. (Marathon Digital)

Marathon “hodling” bitcoin production

In its production update for October Marathon revealed that it produced 417.7 self-mined bitcoins during October 2021, increasing total bitcoin holdings to approximately 7,453 with a fair market value of approximately $457.4 million.

The company said that it last sold bitcoin on October 21, 2020, and since then, has been accumulating or “hodling” all bitcoin generated.

The company also said it had started to charter planes to deliver mining rigs in order from Bitmain “to mitigate the impact of global logistics issues and to ensure that shipments of new miners occur in a timely manner.”

According to The Block, as of Q3, just six large bitcoin mining firms in North America alone were holding over 20,000 BTC, worth well over $1 billion at the time.

Using debt to hoard bitcoin

Previously, Michael Saylor-led MicroStrategy Inc (NASDAQ: MSTR) has raised debt to invest in bitcoin. In June, the company announced a private offering of $400 million of senior secured notes, due 2028, to qualified institutional buyers and persons outside the United States.

On Marathon’s plans announced today, Saylor tweeted:

A publicly traded #Bitcoin miner @MarathonDH is raising $500 million in a debt offering to acquire bitcoin and bitcoin mining machines. This is not factored into anyone's model. $MARAhttps://t.co/WauIvs4bJy

— Michael Saylor⚡️ (@saylor) November 15, 2021

However, the Marathon Digital stock is down a whopping 17% today as this is being written. It is unlikely that investors gave the thumbs down to the debt proposal.

According to reports, the sell-off was triggered after the company revealed that it had received a subpoena from the SEC.

“During the quarter ended September 30, 2021, the Company and certain of its executives received a subpoena to produce documents and communications concerning the Hardin, Montana data center facility described in our Form 8-K dated October 13, 2020,” Marathon said in a 10-Q quarterly filing. “We understand that the SEC may be investigating whether or not there may have been any violations of the federal securities law. We are cooperating with the SEC.”

Related Story: MicroStrategy To Scale Up Its Bitcoin Bet By $400M Using Debt