After Google Deal, TeraWulf Issues $850M Convertible Notes
TeraWulf has expanded its convertible note offering to $850 million to accelerate its data center expansion. The 2031-maturing notes carry a 1% annual interest rate and convert at $12.43 per share, representing a 32.5% premium. Net proceeds of $828.7 million will fund expansion, with $85.5 million reserved for capped calls to limit share dilution. Investors have a 13-day option to add another $150 million. TeraWulf convertible notes follow a recent AI-hosting deal with FluidStack backed by Google, which sent WULF shares surging to $10.70 before pulling back 5% to $9. Under a 10-year hosting agreement at Lake Mariner, FluidStack will expand operations with Google’s $1.4 billion debt support; Google now holds warrants for a 14% stake.
Neutral
The convertible note sale supports TeraWulf’s growth strategy by funding its data center expansion, which is a bullish long-term development. However, the 1% coupon notes and potential dilution led to a 5% share pullback after a prior AI-deal rally, reflecting near-term bearish sentiment. Similar convertible offerings by mining firms often produce muted stock reactions: long-term project funding offsets short-term dilution concerns. Overall, the balance of expansion funding and dilution risk suggests a neutral market impact.