Riot Platforms Prices $525M Convertible Notes at 0.75% Interest Rate

Highlights:

• Riot Platforms has announced $525M convertible notes offering at 0.75% interest set to mature in 2030
• Riot plans to use $511.5M proceeds to acquire bitcoin and support its corporate growth strategy.
• The offering includes an option for buyers to purchase an extra $75M in notes within three days of issuance.

Riot Platforms has announced the pricing of its $525 million convertible senior notes offering. The notes will mature on January 15, 2030, and carry an interest rate of 0.75% per year. Additionally, Riot granted an option to the initial purchasers to purchase up to an additional $75 million of notes.

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Riot Announces Pricing of Offering of 0.75% Convertible Senior Notes.

Link to press release: https://t.co/hblEp6vdEB.

— Riot Platforms, Inc. (@RiotPlatforms) December 10, 2024

Riot Platforms increased the aggregate principal amount from the previously announced $500 million. Riot expects the offering to close on December 11, 2024, and standard closing conditions will apply.

The notes will be unsecured and will be senior obligations of Riot. Riot Platforms will pay semiannual interest on January 15 and July 15 of each year. Riot may redeem all or part of the notes for cash on or after January 20, 2028, under specific conditions. The redemption price will equal 100% of the principal amount plus any accrued and unpaid interest.

The notes will be convertible into cash, Riot’s common stock, or a combination of both, at Riot’s election. Riot will allow the notes to be convertible under specific conditions before July 15, 2029. After that, they can be converted at any time before maturity. 

Riot Platforms has set the initial conversion rate at 67.2767 shares per $1,000 principal amount of notes, equating to a conversion price of approximately $14.86 per share. This price represents a 32.5% premium over Riot’s recent stock price. Riot may increase the conversion rate under certain corporate circumstances.

Stock Volatility Amid Investor Reactions

Riot Platforms’ stock showed mixed reactions following the announcement of the offering. The stock is trading at $11.45 today which is a slight increase of 0.63%. Nevertheless, the stock plunged yesterday, dropping 13.44 percent to finish at $11.81. Investors showed mixed reactions to Riot’s stock following the announcement of the offering. Investors often link such offerings to potential share dilution and more debt.

Riot’s stock has since historically been volatile after such offerings. After conducting a similar ATM offering in 2022, the company initially saw a stock decline. Riot was able to rebound within a few months, using those proceeds to expand its bitcoin mining operations. Over the past year, Riot’s stock has experienced notable fluctuations. The stock reached a 52-week high of $18.75 and a low of $6.36.

Plans for Net Proceeds Deployment

Riot Platforms estimates net proceeds of approximately $511.5 million from this offering after deducting purchaser discounts and estimated expenses. If the option to purchase an additional $75 million of notes is exercised in full, net proceeds will increase to approximately $584.6 million.

Riot plans to spend most of the funds on buying more Bitcoin. It will use the proceeds for general corporate purposes as part of its strategic growth objectives.

Riot will offer the notes to qualified institutional buyers under Rule 144A of the Securities Act of 1933. The shares of common stock issuable upon conversion of these notes are not registered under the Securities Act. The shares may not be offered or sold in the United States without an applicable exemption from registration requirements.

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