Applied Digital to Raise $375 Million via Private Placement of Convertible Notes
Applied Digital, a provider of Bitcoin mining hosting and cloud services, plans to raise $375 million through a private placement of convertible notes. The issuance is expected to close on November 4, 2024, with an annual interest rate of 2.75% and an expiration date in 2030. Initial purchasers will have the option to buy an additional $75 million. The company aims to use a portion of the funds to mitigate shareholder dilution risk through capped option transactions and invest approximately $84 million in stock repurchases.
Applied Digital’s Business Model and Quarterly Revenue
Applied Digital does not engage directly in Bitcoin mining, instead offering data center hosting services to other companies. In its latest financial quarter, the company generated $60.7 million in revenue, with $34.8 million (57%) coming from Bitcoin mining hosting services and $25.9 million (43%) from cloud services.