Bitdeer Technologies ( BTDR ) shares tumbled Thursday on plans to raise $300 million in a private placement of convertible senior notes while also registering a separate direct issuance of Class A shares.
The notes will mature in 2032 and can be converted into cash, stock or a mixture of the two at Bitdeer elections. The underwriters’ greenshoe option is for an additional $45 million of notes.
The Singapore-based company also intends to sell an unspecified number of Class A shares directly to certain holders of its 5.25% convertible notes due 2029. The company plans to use proceeds from both offerings to fund capped call transactions designed to limit share dilution upon conversion of new notes and to repurchase a portion of the 2029 notes in private transactions.
The remaining funds will be used to expand data centers, develop high-performance computing and artificial intelligence cloud businesses, and develop ASIC-based mining equipment.
Convertible debt tends to weigh on stocks as investors consider the risk of future dilution. Simply put, if the company’s stock price rises, noteholders may convert their debt into equity, thereby increasing the number of shares they have. Bitdeer’s use of capped calls is intended to offset some of the impact, although such hedging may increase pricing volatility.
Registering a direct offering is subject to the consummation of the note sale and related repurchases, whereas the note offering may be conducted on its own.
Bitdeer shares fell 17% in early trading, falling below $8 for the first time since April.