TLDR
- IREN stock fell 6% after announcing $875M convertible note offering with potential to reach $1B
- Notes mature in 2031 and can convert to shares or cash under specific conditions
- Funds will support operations and reduce dilution through capped call transactions
- Company securing Nvidia Blackwell GPU contracts for AI data center expansion
- Stock still up 1,000% from April lows despite recent decline
IREN Energy revealed plans Tuesday to raise $875 million through a convertible senior note offering, triggering a 6% drop in after-hours trading. Initial purchasers have an option to buy an additional $125 million, potentially bringing the total to $1 billion.
The announcement came just one day after IREN closed at its all-time high of $61.68 per share. The convertible notes carry a maturity date of July 2031 and allow holders to convert them into IREN shares or cash under certain conditions.
IREN plans to use the proceeds for general corporate purposes and to enter capped call transactions. These financial instruments help minimize share dilution if noteholders choose to convert their debt into equity. The company may seek shareholder approval later to repurchase shares for settling these instruments.
Transition From Bitcoin Mining to AI
IREN Energy is transforming its business model from cryptocurrency mining to AI infrastructure. The company announced last month it would double its GPU capacity to 23,000 units, aiming for $500 million in annualized revenue by early 2026.
The stock gained 6.8% during regular trading Tuesday after IREN announced new multi-year cloud service agreements. These contracts cover Nvidia Blackwell GPU deployments with leading AI companies. So far, the company has secured deals for under half of its planned 23,000 GPUs.
These existing contracts represent roughly $225 million in annualized run-rate revenue. IREN expects these GPUs to become operational by year-end 2025. The company continues discussions with current and potential customers through site visits and technical reviews.
Strong Performance Despite Recent Pullback
IREN stock has climbed approximately 1,000% since hitting lows in April 2025. The surge reflects investor enthusiasm for AI infrastructure companies as demand for computing power grows. The recent dip erased Tuesday’s gains but left the stock well above earlier levels.
As of June 30, IREN had about 272 million shares outstanding. The convertible note structure provides flexibility for both the company and investors. Noteholders benefit from potential equity upside while IREN gains access to capital at favorable terms.
IREN continues pursuing additional contracts beyond its current 23,000 GPU target. The company engages in ongoing commercial negotiations with customers interested in its AI cloud services. Management expects to finalize more agreements as construction progresses on new facilities.
The convertible notes offering follows a pattern among tech companies seeking capital for AI infrastructure. IREN’s pivot from bitcoin mining positions it in the growing market for specialized computing resources. The company competes for contracts against established data center operators and other cryptocurrency miners making similar transitions.
IREN’s agreements with AI companies focus on deploying Nvidia’s latest Blackwell architecture GPUs. These advanced processors handle complex AI workloads and machine learning tasks. Demand for Blackwell GPUs remains strong across the technology sector as companies rush to build AI capabilities.
