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Bitcoin mining company Marathon Patent Group (MARA) shares were down after the Nasdaq-listed firm announced it plans to raise up to $250 million through a direct stock offering.
- The Las Vegas-based company said Tuesday it has entered into a securities purchase agreement with institutional investors for the registered offering of 12.5 million shares of common stock at $20 per share.
- Marathon shares dropped to $21.83 on the news, sliding 16.5% in Tuesday’s pre-market session. In the past year, the company's shares have soared over 2,500%.
- Gross proceeds for this offering are expected to be $250 million.
- CEO Merrick Okamoto told CoinDesk in an email he intends to use the funds to, among other things, fund more mining machine purchases from Bitmain and expand his company's mining facilities amid the mining sector's ongoing "arms race" as manufacturers struggle to keep pace with demand.
- H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering, which closes on Jan. 15.
- The Las Vegas firm's shares surged last week to the highest in more than three years, bringing the firm a total market value of $1 billion. That number is now at $1.377 billion.
- The firm has recently invested heavily in new cryptocurrency mining equipment, making orders for 90,000 machines in October and December, expecting to reach a total mining capacity of 10.36 exahashes per second (EH/s) once the new machines are fully deployed.
