Applied Digital to Raise $375 Million Through Convertible Note Offering

On Nov. 1, Applied Digital, a bitcoin mining hosting and cloud services company, plans to raise $375 million through a private placement of convertible notes. The notes, which bear interest at 2.75 percent per annum and will mature in 2030, will be available to initial purchasers for an additional $75 million. The company plans to use a portion of the funds for capped option trades to hedge against shareholder dilution risk and invest about $84 million in share repurchases. Applied Digital is not directly involved in bitcoin mining, but rather provides data center hosting services to other companies. In its latest quarterly report, Applied Digital reported that $34.8 million of its $60.7 million in revenue came from its bitcoin mining hosting business, with the remaining 43 percent coming from its cloud services business.