The Bitcoin mining company CleanSpark, announced a significant expansion of its convertible senior notes offering this week. The initial $1 billion figure was increased to $1.15 billion, the company confirmed. A significant portion of the funds will be used to repurchase its own stock. This financial maneuver occurs as CLSK stock falls for a second consecutive day in the market.
CleanSpark detailed the use of the net proceeds. Approximately $460 million will be allocated to repurchasing the company’s common stock. These buybacks were privately negotiated directly with the note investors. The agreed-upon repurchase price is $15.03 per share, matching Monday’s closing price. Furthermore, the company mentioned in its statement that it might offer an additional $150 million in notes if demand warrants it.
On the other hand, the remaining funds have a clear strategic destination. They will be used to expand CleanSpark’s power and land portfolio. The financing will also support the development of new data center infrastructure. Finally, a portion will be used to repay existing Bitcoin-backed credit lines and for general corporate purposes. This move aims to strengthen the company’s balance sheet and fund its future growth.
Why is CLSK stock falling if the company is buying back?
Despite the stock buyback news, the immediate market response was negative. CleanSpark (CLSK) shares fell for the second consecutive day. CLSK’s price registered a drop of nearly 8% on Tuesday, settling at $13.86 per share. This extends the negative streak of the last five days to over 14%. The issuance of convertible debt can often worry the market about potential future dilution for existing shareholders.
Likewise, the bearish sentiment was not limited to CleanSpark. Other publicly traded companies in the Bitcoin mining sector also suffered notable declines. Riot Platforms and Cipher Mining were down about 6% each. Meanwhile, Terawulf experienced an even steeper drop, exceeding 10% on Tuesday. This sector faces volatility even as Bitcoin trades above $103,000 this week.
These convertible notes are senior unsecured obligations. They will not bear regular interest and will mature on February 15, 2032, unless converted or redeemed earlier. The initial conversion rate equates to $19.16 per share. This represents a 27.5% premium over Monday’s closing price. Although the market is reacting with short-term selling, this Bitcoin mining company secures significant long-term financing for its operational expansion plans.
