Marathon Digital Holdings Inc. (MARA) continues to fall premarket, reaching $51.90 against its last close at $55.40 on November 15. Intraday trading the stock plummeted 27.03%, followed by a further decrease of 6.32% premarket. The premarket fall volume was 189.2 thousand, against the previous day trading volume of 34.93 million during market hours. On the previous day, the stock traded between $54.65 and $73.50. The 52-week range for MARA varied between $2.33 and $83.45, at an average volume of 11.5 million (65-day avg.). MARA trades at a current market capital of $7.56 billion.
Marathon Digital Holdings Inc. (MARA) is one of the largest Bitcoin self-mining companies in North America.
Reasons behind MARA’s continued Fall
Unsecured Convertible Debt Offering
On November 15, MARA announced unsecured senior convertible debt offering. The offering size was increased from previously announced $500,000,000 to $650,000,000. Upon complete subscription, this convertible debt offering could generate up to $575 million. While the proceeds are huge, but the fact that the offering was done through convertible debt offering and not share offering has put investors under distress. The sheer size of the offering can permanently change the capital structure of the company.
Investigation over possible Violations
While the debt offering had put the stock on a downtrend, it was further escalated by the new of the company being investigated over possible violations of federal securities laws. On November 16, early morning it Law offices of Howard G. Smith announced the investigation. Furthermore, MARA reported that the company received a subpoena from U.S Securities and Exchange Commission. The company was asked to deliver documents and communications regarding its Hardin, Montana data centre facility.
Previously, MARA entered agreements with various parties for designing and building a 100-megawatts data centre in Hardin town. As part of the deal, the company issued 6 million restricted common shares. MARA’s Hardin facility is currently under investigation by the SEC.
MARA’s Q3 Financial Highlights
On November 10, 2021, Marathon Digital Holdings Inc. (MARA) announced its third quarter financial results. The Q3 2021 revenue increased to $51.7 million from $29.3 million in the previous quarter. The revenue showed an increase of 6,091% year over year from $835,000 in Q3 of 2020. Moreover, the non-GAAP net income was $85.4 million or $0.85 per diluted share.
While MARA reported great Q3 financial results, the currents events of the company being under investigation and its convertible debt offering has put the stock in for a bleak future.
