Riot Platforms Announces $500 Million Convertible Notes Offering

Highlights:

• Riot has announced a private offering of $500M convertible notes due in 2030.
• The total operating hashrate of the company has risen to 25.8 exahashes per second.
• Riot has accumulated 11425 Bitcoins after mining 495 Bitcoins in November.

Riot Platforms, a leader in cryptocurrency mining, announced a private offering of $500 million in convertible senior notes. These notes mature in 2030 and are only available to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933. Riot has also granted initial purchasers of the notes the right to purchase additional notes of up to $75 million within the three days following issuance. 

Riot Announces Proposed Private Offering of $500 Million of Convertible Senior Notes. ​

Net proceeds from this offering to be used primarily to acquire bitcoin and for general​ corporate purposes. ​

Link to press release: https://t.co/z7xQaB9eC4.

— Riot Platforms, Inc. (@RiotPlatforms) December 9, 2024

The company intends to use the proceeds towards the purchase of more Bitcoin and for general corporate purposes. This is a strategic play by Riot to advance its direction of building its financial position and operational capacity. The offering is subject to market conditions, and there is no assurance the offering will be completed.

Riot Terms and Conditions of the Convertible Notes

These notes will mature on January 15, 2030, unless redeemed, repurchased, or converted prior to their terms. Riot retains the option to redeem the notes for cash starting January 20, 2028. Any partial redemption must leave at least $50 million in outstanding notes. 

The notes can be converted into cash, Riot’s common stock, or a combination of both, at Riot’s discretion. Before June 15, 2029, conversion will be limited to specific events and periods. After that date, the notes can be converted anytime until two trading days before maturity. 

The initial conversion rate and terms will be decided at the time of pricing. In addition, Riot expects the volume weighted average price of its stock on its pricing date to be its reference price.

Hash Rate Expansion and Operational Milestones

Riot is still growing its mining capacity. In November, the operating hash rate increased by 13% compared with the previous month. This brought Riot’s operating hash rate to 25.8 exahashes per second (EH/s). 

This growth was driven by deploying more efficient and advanced mining equipment. Riot’s hash rate capacity also grew by 5% during the month, underscoring its commitment to scaling operations. Riot was able to maintain consistent Bitcoin production levels despite network difficulty increasing by 7%.

Strategic Accumulation of Bitcoin Reserves

By the end of November, Riot had added 1100 to its Bitcoin holdings, growing to 11,425, a 5% increase over October. By holding Bitcoin, the company’s strategy indicates its belief in the long term probability of the asset. 

Riot Announces November 2024 Production and Operations Updates.

"Riot mined 495 #Bitcoin in November, demonstrating consistent month-over-month production despite a 7% increase in network difficulty during the month," said @JasonLes_, CEO of Riot. "This stability in our…

— Riot Platforms, Inc. (@RiotPlatforms) December 3, 2024

Riot mined 495 Bitcoins in November, averaging 16.5 Bitcoins per day. However, production declined by 10% year over year but was still up slightly from October. Moreover, this demonstrates Riot’s ability to evolve to market challenges and its operations. 

Financially, the energy management efforts of the company have been successful. In November, the company earned $1.0 million in power credits hence bringing a year-to-date total to $1.4 million. Riot uses these credits to help offset energy usage during periods of low demand.

Riot Platforms CEO Jason Les has noted that their production stability has been achieved due to continuous operational improvements and strategic deployment of new miners.