Bitdeer shares plunge 17% following announcement of $300M convertible debt deal
The cryptocurrency mining company has unveiled its second convertible senior note offering to date, contributing to a 29% year-to-date decline in share value.
On Thursday, Bitdeer Technologies Group experienced a significant decline in share value following the company's announcement regarding a $300 million convertible senior note offering by the Bitcoin mining and artificial intelligence infrastructure provider.
According to Bitdeer's announcement, the company plans to offer a "principal amount" totaling $300 million through convertible senior notes, with purchasers having the option to acquire an additional $45 million through a private placement arrangement.
This marks the company's second convertible note offering, coming after a $150 million offering launched in April 2024, which similarly resulted in an 18% decline in stock value.
A convertible senior note represents a type of loan that allows investors to exchange their debt for shares of the company's common stock, with these note holders receiving priority status above other creditors should the company enter bankruptcy proceedings.
The newly issued notes, scheduled to mature in 2032, represent senior unsecured obligations that pay interest on a semiannual basis, and provide holders with the flexibility to convert their holdings into cash, stock, or a mix of the two.
According to Bitdeer, the funds raised will be allocated toward datacenter expansion initiatives, artificial intelligence cloud service growth, development of cryptocurrency mining equipment, and general corporate operational needs.
Bitdeer maintains its headquarters in Singapore while operating datacenters across multiple international locations including the US, Norway, and Bhutan.
Bitdeer stock tanks 17% on latest offering
By the close of trading on Thursday, Bitdeer (BTDR) shares had declined 17.38% to reach $7.94, with after-hours trading showing a further modest decrease to $7.89.
The company's stock has experienced a 29% decline since the start of the current year and has fallen nearly 70% from its all-time peak of approximately $26 reached in January 2025.
Issuance of convertible debt typically creates downward pressure on stock prices because investors must account for potential future dilution, since rising stock values may prompt noteholders to exercise their conversion rights into equity, thereby expanding the total number of outstanding shares.
Capped call transactions to offset dilution
In parallel, Bitdeer is conducting a registered direct offering of shares connected to a strategy for repurchasing a portion of its outstanding convertible notes scheduled to mature in 2029.
The company intends to employ "capped call transactions," which are derivative instruments commonly utilized during convertible note issuances to help mitigate potential dilution effects, though this strategy proved insufficient to prevent the stock's downward trajectory.