BUZZ-Cipher Digital’s losses widen after issuing $850 million convertible bonds

October 14 - ** Data center operator Cipher Digital (ticker: CIFR.O) shares fell 1.6% to $11.16 ahead of Wednesday's open after the company completed a financing round

** CIFR announced the pricing (link) of a private placement for $850 million of 0% convertible bonds, due November 1, 2032; the conversion price is set at $15.31, a 35% premium to Tuesday’s closing price of $11.34

** On Tuesday, CIFR's share price plunged nearly 13% to hit a more than one-year low after the company unveiled (link) the issuance plan intended to fund its Barber Lake project (link) and expand its high-performance computing (HPC) capabilities

** Northland Capital Markets noted in a Wednesday research report that CIFR disclosed the Barber Lake project's capital expenditure per MW has risen from a prior guidance of $9 million to $11 million to about $14 million, sparking market concerns over its financing capability and execution

** "We believe this is the main driver for the sector-wide weakness yesterday, as the market had not anticipated such significant additional or over-budget capital expenditures. Moreover, this is an extremely difficult time to complete any fundraising," Northland wrote in the report

** Morgan Stanley and Goldman Sachs are joint bookrunners for this offering

** CIFR plans to use $89.7 million in net proceeds to fund capped call option transactions; the capped price of $28.35 represents a 150% premium to the previous closing price

** In addition to this offering, the company also plans to convert some of its 1.75% convertible bonds due 2030 into shares

** As of Tuesday, the stock had declined 23% year-to-date, with a market capitalization of $4.7 billion

** According to data from London Stock Exchange Group (LSEG), 20 out of 22 analysts rate the stock as "strong buy" or "buy," while two rate it as "hold"; the median target price is $28

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