Cipher Mining Technologies Inc. (NASDAQ: CIFR) has successfully priced an upsized private offering of $1.08 billion in convertible senior notes due 2031. The offering was increased from its initially announced size of $800 million, reflecting strong investor demand.
The 0.00% coupon notes are senior unsecured obligations. They are convertible into CIFR shares at an initial price of $16.03 per share, representing a significant 37.5% premium over the stock's closing price of $11.66 on Thursday. The deal includes provisions for investor repurchase at par value in 2029, while Cipher Mining retains the right to redeem the notes starting in 2028 if its share price trades 30% above the conversion threshold.
Cipher Mining plans to allocate the net proceeds of approximately $1.08 billion to several strategic initiatives. These include funding capped call transactions, accelerating the construction of its Barber Lake data center, and expanding its high-performance computing pipeline, which has a capacity of 2.4 gigawatts (GW) to support its Bitcoin mining operations.
This substantial financing follows closely on the heels of the company's recent announcement of a major $3 billion artificial intelligence (AI) hosting agreement with industry giants Google and Fluidstack.
Despite the positive news of the upsized offering and the AI deal, CIFR stock experienced volatility. Shares declined by as much as 17% during Thursday's trading session and were down an additional 1% in premarket activity, trading around $11.55. Market analysts suggest this short-term price pressure is likely attributable to delta hedging activities by the financial institutions underwriting the convertible note deal, a common phenomenon that often temporarily weighs on a stock's price as counterparties manage their risk exposure. Similar price patterns were observed following convertible note offerings by companies like Strategy and Semler Scientific.