Mara Holdings Shocked by $1.5 Billion Bitcoin Sale... Stock Price Falls Amid Over $1.2 Billion Loss

▲ Bitcoin (BTC) Price Drop

Bitcoin mining company Mara Holdings (MARA Holdings, MARA) is facing stock price pressure due to a large first-quarter loss and the sale of $1.5 billion worth of Bitcoin, leading it to restructure and shift its focus from mining to artificial intelligence and IT infrastructure.

NewsBTC reported on May 14 (local time) that MARA Holdings still holds 35,303 BTC, worth approximately $2.84 billion, maintaining its position as the world's fourth-largest corporate Bitcoin holder. However, investor concerns have grown after the company recently sold off a significant portion of its reserves. MARA's stock price fell 5% in Tuesday's trading, dropping to $11.74 intraday, and after closing near $12.65, it further declined by 1.85% in after-hours trading.

The stock price decline occurred immediately after the company's first-quarter earnings announcement. MARA reported a net loss of $1.26 billion in the first quarter, more than double the $533 million loss in the same period last year. Revenue decreased by 18% year-over-year to $175 million, with the article mentioning that the drop in Bitcoin prices was partly responsible for the revenue decline.

During the first quarter, MARA sold 20,880 BTC, worth approximately $1.5 billion. Of this, 15,133 BTC, valued at about $1 billion, sold between March 4 and March 25, was used for convertible bond repurchases. The company utilized approximately $1 billion from the sale proceeds to reduce its convertible bond burden from $3.3 billion to $2.3 billion, decreasing its debt by about 30%. This transaction resulted in a $71 million gain from debt extinguishment.

The business strategy is also rapidly changing. MARA has stated that it has no plans to acquire large quantities of ASIC mining equipment in the future. Approximately 90% of the company's non-hosting mining capacity is reportedly convertible to artificial intelligence (AI) and IT infrastructure. The company is pursuing a strategy to generate revenue from its power assets by deploying existing Bitcoin mining operations alongside new infrastructure and leveraging its mining operational experience.

Restructuring is also underway. MARA plans to reduce its workforce by 15%, saving $12 million annually. Concurrently, it has completed a major transaction to acquire Long Ridge Energy from FTAI Infrastructure. The acquisition, including approximately $785 million in debt, approaches $1.5 billion and marks the largest acquisition in MARA's history. Long Ridge operates a 505-megawatt combined-cycle gas power plant in Ohio and owns over 1,600 acres of adjacent land. MARA anticipates approximately $144 million in annual adjusted EBITDA from these assets.

Despite Tuesday's decline, MARA's stock price has risen 30% over the past month. However, unlike MicroStrategy, the largest corporate Bitcoin holder, which continues to buy, MARA is selling Bitcoin, reducing debt, and reorganizing into an infrastructure business. The article points out that the contrasting actions of the two companies illustrate the strategic differences among cryptocurrency firms in responding to the current market environment.

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