IREN has now secured $3.6 billion in new funding in two deals that priced this week. The direct stock sale, with 39,699,102 shares registered at $41.12, is expected to raise approximately $1.6 billion and close on December 8th.
In addition, $2 billion was extracted from the pricing of a new convertible bond package, split into $1 billion of 0.25% bonds due in 2032 and $1 billion of 1% bonds due in 2033.
Shares fell 15% on Tuesday’s announcement of the capital raising activity, but were up slightly in early activity on Wednesday after the sale price was determined. Although IREN has risen significantly this year, it is now down nearly 50% since hitting an all-time high just a month ago.
IREN bulls may take some solace in the fact that Jim Cramer has told investors to avoid companies announcing new financings and named IREN just as the miner completed one of the largest financings in the mining industry. “If you’re raising IREN-style capital, sell now,” Cramer said, warning that the large issuance reflects a late-cycle pattern associated with 1999-2000.
Some might say that Mr. Kramer, a former hedge fund manager turned full-time financial media figure, has become a key contrarian signal, thanks to his buy calls near the top of the market and sell calls at the bottom.
Proceeds from IREN’s stock will fund a major repurchase of the company’s highly profitable convertible debt. The company agreed to repurchase the 2030 Notes for $227.7 million and the 2029 Notes for $316.6 million, for a total of $1.6 billion, reflecting the extent to which IREN’s stock price exceeded the previous conversion prices of $13.64 and $16.81. Once repurchased, the banknote disappears and cannot be exchanged.
Additionally, IREN plans to spend $174.8 million on capped call transactions to reduce dilution from the new convertible notes.
The funding represents a fundamental balance sheet restructuring for the former Bitcoin miner turned AI computing provider to weather volatile markets and the mechanical hedging flows associated with trading.