Marathon Digital Adds 15 Million Shares To Compensation Package For Management
Marathon Digital Holdings (NASDAQ: MARA) has filed a registration statement on Form S-8 with the Securities and Exchange Commission (SEC), registering an additional 15,000,000 shares of its common stock. These shares, with a par value of $0.0001 per share, are earmarked for issuance under the company’s amended and restated 2018 equity incentive plan.
This move brings the total number of shares reserved for issuance under the plan to 30,000,000 shares. However, the timing of this announcement raised concerns among shareholders, as the company faces ongoing challenges and market volatility.
Following the news, the firm’s shares dropped around 7%, sustaining the decline it has been experiencing in the past days. As of last closing, the additional 15 million shares is estimated to be around $386 million.
This follows the company’s recent financial report where it exceeded fourth-quarter sales expectations, propelled by a higher bitcoin price during the period. Reporting sales of $156.8 million, the company surpassed analysts’ average estimate of $148.8 million.
However, the quarter’s net loss, excluding the impact of new accounting rules, stood at $0.02 per share, contrary to analysts’ projected earnings per share of $0.04.
Marathon disclosed that it sold 56% of the bitcoin it produced during the quarter to cover operational costs. Additionally, the company reaffirmed its plans to expand mining power to approximately 35 to 37 exahash per second (EH/s) in 2024 and 50 EH/s by the end of 2025. With orders placed for 22 exahash of miners and potential to add 23 exahash more, Marathon sees opportunities to expedite growth.
In a separate announcement, Marathon revealed its initiative to launch a new Bitcoin layer-2 network called Anduro. This network aims to facilitate the creation of multiple sidechains, fostering innovation within the Bitcoin ecosystem. The company is already developing the first two sidechains: one for the Ordinals community, essentially NFTs on Bitcoin, and another Ethereum-compatible chain for asset tokenization.
This move follows Marathon’s recent establishment of “Slipstream,” a business aimed at streamlining the confirmation of large or “non-standard” bitcoin transactions.
Earlier in February, it was announced that Marathon is set to take over operational control of the sites from Hut 8 Corp(TSX: HUT). The mining sites on a combined basis account for 390 megawatts of operational capacity, which it acquired for $178.6 million from Generate Capital on January 16.
While the purchase for Marathon represents mining cost reductions of up to 30% per bitcoin, the sale of the facilities represents the loss of revenues for Hut 8. Under a termination agreement entered into at the end of January, Hut 8 will cease to provide management services to the site as of April 20, 2024. However, they will receive a $13.6 million termination fee for the cancelled arrangement.
Marathon Digital last traded at $25.71 on the Nasdaq.
Information for this briefing was found via Edgar, CoinDesk, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
