Bitfarms, a prominent blockchain infrastructure company, has announced a new offering of $300 million in convertible senior notes. The sale, intended to fuel the company’s expansion efforts, comes on the heels of a significant surge in its stock price. This move follows a broader strategy to capitalize on the company’s pivot toward AI infrastructure, which has contributed to substantial growth in its stock value this year.
Convertible Notes Offering Details
The $300 million in convertible senior notes, due in 2031, will be offered with an additional $60 million available for purchase within 13 days of the initial issuance. The notes will not be backed by collateral and will offer semi-annual interest payments beginning in 2026. These convertible notes can be redeemed for cash, shares, or a combination of both, depending on the company’s decision.
The company aims to use the proceeds from this offering for general corporate purposes and to fund capped call transactions, designed to limit dilution of existing shareholders. The conversion of the notes will be restricted until October 15, 2030, with specific conditions that will apply during this period.
Strategic Move Amid Stock Price Surge
Bitfarms has seen remarkable growth in its stock price in 2025. Year to date, the company’s shares have skyrocketed by more than 315%, driven largely by its shift toward AI and high-performance computing (HPC) infrastructure. Since September, the stock has gained approximately 400%, signaling strong investor confidence in the company’s new direction.
The pivot to AI and HPC has been a strategic move to diversify Bitfarms’ business model, which previously focused primarily on cryptocurrency mining. With AI technologies gaining momentum, Bitfarms has positioned itself to take advantage of this market shift, helping to explain the sharp rise in its share price. The company’s growth trajectory has made it a prominent player in the AI infrastructure sector.
Use of Proceeds for Corporate Growth
The proceeds from the $300 million convertible note offering are expected to support several areas of Bitfarms’ corporate growth. A portion of the funds will be allocated to general corporate purposes, helping the company maintain its operations and fund ongoing projects. Additionally, the company plans to use part of the funds to conduct capped call transactions. These transactions are designed to limit the dilution impact of the notes’ conversion, aiming to protect shareholders from potential decreases in their equity ownership.
By using capped call transactions, Bitfarms seeks to offset dilution up to 125% of its share price at the time of pricing. This will likely help stabilize the company’s stock value even as new shares are issued to cover the convertible notes.
Market Reaction to the Offering
Despite the impressive stock performance over the past year, Bitfarms’ latest announcement saw its share price drop by 4% in pre-market trading. The slight decline may reflect market reactions to the potential dilution effects of the convertible note offering. While the convertible notes offer a strategic financing method, investors may be cautious about the long-term impact on the company’s equity.
Bitfarms’ management remains focused on its expansion strategy, particularly in the AI sector. The company’s commitment to diversifying its revenue streams is a key factor in its recent growth, and the convertible notes are a part of that broader strategy. The funds raised will be crucial in supporting Bitfarms’ efforts to remain competitive in a rapidly evolving technological landscape.
