Rally Cools on $850M Convertible Note Sale After Google Deal

TeraWulf’s (WULF) breakneck rally cooled on Tuesday as the firm increased its convertible note sale to $850 million and announced the pricing of the offering, aimed at funding its data center expansion.

The notes will mature in 2031 with 1% annual interest, and will be exchangeable into cash, stock or both at TeraWulf’s election, the company said in a Monday press release. Initial conversion price is set at $12.43 per share, representing a 32.5% premium to last week’s close.

Net proceeds are estimated at $828.7 million, and are earmarked for data center expansion with $85.5 million earmarked for capped call transactions designed to limit share dilution, the firm said. Buyers have a 13-day option to add another $150 million to the deal, which is expected to close this week.

WULF fell 5% below $9, pulling back from Monday’s $10.7 high after an almost 100% rally following a Thursday deal with AI cloud platform Fluidstack, which is backed by tech giant Google.

Under a 10-year hosting agreement, FluidStack will expand operations at TeraWulf’s Lake Mariner campus in New York, backed by Google’s $1.4 billion increase to its debt support for the project. Google now holds warrants representing a 14% equity stake in the company.

Read more: TeraWulf Adds Another 10% as Google Lifts Stake