Bitdeer Technologies (BTDR) shares plunged Thursday following a plan to raise $300 million through a private sale of convertible senior notes, alongside a separate registered direct offering of Class A shares.
The notes, maturing in 2032, can be converted into cash, shares or a mixture of the two, at Bitdeer’s option. The underwriter’s green shoe option is for an additional $45 million in notes.
The Singapore-based company also intends to sell an unspecified number of Class A shares directly to certain holders of its 5.25% convertible notes due 2029. It plans to use the proceeds from both offerings to fund capped call transactions intended to limit share dilution if the new notes are converted, and to repurchase a portion of the 2029 notes in private transactions.
All remaining funds will be dedicated to data center expansion, growth of its high-performance computing and AI cloud computing businesses, and development of ASIC-based mining rigs.
Convertible debt often puts pressure on stocks as investors factor in the risk of future dilution. Simply put, if the company’s stock rises, note holders can convert their debt into equity, thereby increasing the number of shares. Bitdeer’s use of capped calls is intended to offset some of this effect, although such hedging can add volatility around prices.
The direct registered offering is dependent on the completion of the sale of the notes and associated redemptions, while the offering of the notes may occur on its own.
Bitdeer shares fell 17% in early morning trading below $8 for the first time since April.
