Fast-growing AI player taps markets for billions amid data-center frenzy | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

On Dec. 3, Bitcoin miner-turned-AI-data-firm Iren announced pricing of $3.6 billion in combined equity and convertible note offerings, a significant move in its transition into an AI infrastructure provider.

In its first part, Iren priced $2 billion private convertible notes offering:

$1 billion due 2032 with a 0.25% interest rate
$1 billion due 2033 with a 1.00% interest rate

This will provide the company with long-dated, low-cost capital and also prevent immediate stock dilution.

Iren’s stock is up 337% year to date.

Iren

Who is Iren?

An Australian company best known for its central role in the Bitcoin mining industry, Iren has now emerged as a contender in the AI infrastructure sector.

Over the past year, its stock price has seen a 200% increase, as IREN deliberately shifted its capital and existing mining infrastructure toward AI computing and cloud services.

Redefining its growth trajectory, which took a slight hit last month after being impacted by fears surrounding the future of AI investments, it continues to raise capital to fund its AI ambitions and expansion.

As computing demand driven by increased AI workloads continues to grow, Iren is also increasing its power outputs. It currently holds 2.9 gigawatts of grid-connected power across more than 2000 acres and operates 810 MW of operating data centers across North America.

Earlier last month, Iren also signed a five-year $9.7 billion GPU cloud services contract with Microsoft to supply NVIDIA GB300 chips from its 750 MW Texas campus.

Iren seeks to raise $3.6 billion

The two $1 million series carry the same initial conversion rate of 19.46 ordinary shares per $1,000 principal amount of notes, equating to a conversion price of approximately $51.40 per ordinary share.

Each of the $1 billion notes carries a 25% conversion premium, pushing the price higher than the market price at the time of the deal. Iren traded at $43.68 on Dec. 3.

To further manage potential dilution, IREN has entered into capped call transactions that raise the effective price at which dilution begins to $82.24 per share.

While Iren has given noteholders, mostly private lenders, the option to “convert their notes at any time of their election until the close of business on the second scheduled trading day immediately before the maturity date of the relevant series of notes.”

Iren may choose to settle the conversions in cash, ordinary shares, or a combination of both. This decision, however, impacts dilution, depending on how Iren decides to settle the conversion.

Suppose investors fully exercise their options to purchase additional notes ($150 million in each series). In that case, Iren expects to raise approximately $2.27 billion, which it will use to repurchase debt and invest in expanding its AI infrastructure.

Of this, Iren intends to fund the $174.8 million cost of entering into the capped call transactions and use the rest to repurchase the portion of existing convertible notes for cash.

In a parallel transaction, Iren completed a $1.632 billion direct equity offering of 39.7 million shares priced at $41.12. Proceeds from the sale will be used to repurchase and extinguish convertible notes maturing in 2029 and 2030. These notes carried significantly lower conversion prices of $13.64 and $16.81, respectively.

The offering is expected to close on Dec. 8, subject to regulatory approval.

Following the news, Iren’s stock surged 6.9% on Wednesday, Dec. 3, covering some of its earlier losses. As of this week, it currently stands 11% down, having reported a 36% decline over the past month.