Riot Platforms Plans $500 Million Offering to Boost Bitcoin Holdings
Riot Platforms Inc. (NASDAQ: RIOT), a prominent U.S. cryptocurrency miner, plans to enhance its Bitcoin strategy by offering $500 million in convertible senior notes due January 15, 2030. The company will provide initial private investors a three-day option to purchase an additional $75 million of the notes.
The raised funds will be allocated for acquiring more Bitcoins and general corporate purposes.
Market Impact on Riot Platforms
Following the announcement, RIOT stock fell nearly 10 percent to approximately $11.67 during mid-morning trading on December 9. This capital raise indicates potential dilution of existing outstanding shares.
Despite this, Riot Platforms has experienced significant growth, with a 72 percent increase over the past three months. The notable rise in Bitcoin compared to traditional investments has further contributed to the long-term growth of RIOT shares.
In November, Riot Platforms reported a daily average Bitcoin production of 16.5 BTC, up from 16.3 units in October. By the end of November, the company held over 11,425 Bitcoins valued at over $1.1 billion, based on an exchange rate of about $98k. The total mined in November was 495 BTC, reflecting a 10 percent decrease from the previous month.
Riot also achieved a 5 percent increase in hash rate capacity, reaching approximately 30.8 exahashes per second (EH/s). Its mining operations are located in central Texas and Kentucky.
Bigger Picture
Institutional adoption of Bitcoin has strengthened the bullish outlook for the asset. According to Coinspeaker, Bitcoin supply on centralized exchanges has dropped significantly over the past year, with a reduction of over 94k units in the last 30 days, bringing the total to about 2.25 million.
MicroStrategy Inc. (NASDAQ: MSTR), holding approximately 423,659 BTC, has inspired other companies to adopt similar strategies. Additionally, countries like Bhutan and El Salvador are moving towards establishing strategic Bitcoin reserves.
In the U.S., the re-election campaign of President-elect Donald Trump was influenced by his Bitcoin policy proposals, which included plans for a national Bitcoin stockpile if elected.