Applied Digital Plans $375 Million Raise to Enhance Bitcoin Hosting Services Amid Market Growth

Applied Digital, a prominent player in the Bitcoin mining hosting sector, has announced plans to secure $375 million through a private placement of convertible notes, as recently reported by COINOTAG. This funding initiative is slated to close on November 4, 2024, with an attractive annual interest rate of 2.75% and a maturity date set for 2030. Notably, the initial purchaser will have the option to acquire an additional $75 million in notes. The proceeds will primarily be allocated to capped option transactions aimed at mitigating shareholder dilution risks, alongside a strategic investment of approximately $84 million in stock repurchases.

Despite not directly engaging in Bitcoin mining, Applied Digital provides essential data center hosting services to various firms. According to their most recent quarterly financial report, a significant $34.8 million of the estimated $60.7 million in revenue stemmed from their Bitcoin mining hosting operations, reflecting the company’s pivotal role in supporting the cryptocurrency ecosystem. The remaining 43% of revenue was generated from their cloud service offerings, illustrating a well-diversified operational model.