Bitfarms will raise cash by issuing $300 million of senior convertible notes, giving initial buyers the right to purchase an additional $60 million. The stock fell about six percent before the market opened as investors weighed dilution risk and short-term trading pressure. The company aims to bolster liquidity and fund expansion while navigating a choppy market.
The notes mature on 15 January 2031 and begin paying interest semiannually on 15 July 2026. As convertible securities, they start as debt and can later be exchanged for equity if specific price conditions are met, potentially increasing the share count over time.
Bitfarms plans to use proceeds to expand mining operations and maintain sufficient cash reserves. To mitigate dilution from potential conversion, the company will purchase capped call contracts that pay if the stock trades above 125 percent of the pricing day close, cushioning the impact of new shares at higher price levels.
The transaction remains subject to customary approvals from both Nasdaq and the Toronto Stock Exchange, and will not close until these sign-offs are secured.
Deal terms and use of proceeds
The early six percent drop reflects expectations of eventual share issuance and hedging by initial buyers. Those buyers typically hedge via stock and options, adding selling pressure and volatility in the near term.
For investors and compliance teams, the key considerations are dilution, volatility, regulatory clearance, and cash flow timing. Conversion would add shares to the float unless the capped calls fully offset the effect; hedging flows may drive short-term swings; closing depends on both exchanges’ approvals; and interest beginning in mid-2026, with maturity in 2031, shapes funding needs.
Next steps include finalizing pricing and seeing whether the initial buyers take the additional $60 million. Investors and compliance staff should monitor the exact conversion terms and the hedging activity by buyers, which are likely to influence the share price in the coming weeks and months.
