Shares of TeraWulf Inc. (NASDAQ: WULF), a cryptocurrency mining company, plummeted by 6.95% on October 24, 2024, after the company announced the pricing and upsize of a $425 million convertible senior notes offering.
The offering, which will be sold in a private placement to qualified institutional buyers, involves the issuance of 2.75% Convertible Senior Notes due in 2030. Investors often view convertible debt offerings negatively, as they can lead to potential share dilution for existing shareholders when the notes are converted into common stock.
While TeraWulf plans to use a portion of the net proceeds to repurchase its stock, potentially offsetting some of the dilution concerns, the announcement of the sizable convertible notes offering appears to have weighed heavily on the company's stock price in early trading.
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