Bitcoin miner IREN and healthcare firm Kindly MD announced multimillion-dollar convertible note offerings Tuesday, triggering negative market reactions.
IREN shares finished Tuesday's session up 6.81% but dropped 4.9% after hours to $58.66 following the announcement of an $875 million convertible senior note offering. The company plans to use proceeds for general corporate purposes and working capital needs.
Kindly MD, which merged with David Bailey's Bitcoin firm Nakamoto, revealed a $250 million five-year convertible note deal with fintech company Antalpha. The stock fell 0.97% during trading and shed another 2.83% after hours to reach $0.99.
The note offerings come amid a slowdown in venture capital activity within the crypto sector. Galaxy Research's latest report found a 59% decline in available funding and a 15% drop in deal count compared to the previous quarter.
IREN also placed an additional $125 million of notes available for initial purchasers, all convertible into company shares. The firm intends to fund capped call transactions, which protect against excessive share creation by placing price cap limits when debt converts to stock.
Kindly MD entered a non-binding letter of intent with Antalpha for long-term financing aimed at reducing dilution risk compared to standard convertible debt. Proceeds will expand $BTC holdings in the KindlyMD Bitcoin Treasury and cover general corporate purposes.
The funds will also replace an existing $203 million Bitcoin‑Secured loan from Two Prime Lending Limited. Pending completion of the convertible debt facility, Antalpha will provide an interim Bitcoin‑backed loan to KindlyMD.
Bailey stated the partnership represents Bitcoin companies supporting each other, addressing current financing needs while establishing structures tailored to BitcoinTreasury companies' unique requirements.
Shareholders often express concern that convertible note deals reduce the value and voting power of existing stock holdings.