IREN Plummets 7% Amid $2 Billion Convertible Note Offering and Share Repurchase Plan

Summary
• IREN shares fell 7.02% intraday to $45.09, a sharp decline from its 52-week high of $76.87.
• The company announced a $2 billion convertible note offering and a concurrent share repurchase to fund debt restructuring.
• Options volatility spiked, with 20 contracts trading at implied volatilities exceeding 100%.

IREN’s stock is in freefall after a complex capital-raising move triggered investor skepticism. The company’s dual-track strategy—issuing $2 billion in convertible notes and repurchasing existing debt—has sent shares tumbling, testing key support levels. With a 7% drop and a dynamic P/E of 8.46, the stock’s technicals and options activity suggest a volatile near-term outlook.

Convertible Debt Overhang and Shareholder Dilution Concerns
IREN’s 7% intraday drop stems from its announcement of a $2 billion convertible note offering, split into $1 billion due 2032 and $1 billion due 2033, alongside a registered direct share offering to fund repurchases of existing convertible notes. The move, aimed at restructuring debt and reducing dilution, has raised red flags among investors. The new notes carry conversion rights that could pressure the stock price if exercised, while the concurrent equity offering signals immediate shareholder dilution. The market’s reaction reflects concerns over capital efficiency and the company’s ability to balance growth ambitions with financial stability.

Options Playbook: Capitalizing on Volatility and Key Support Levels
• MACD: -2.73 (bearish), Signal Line: -2.16, Histogram: -0.58 (negative momentum)
• RSI: 31.99 (oversold), Bollinger Bands: $34.46–$73.24 (wide range), 200D MA: $23.77 (far below price)

IREN’s technicals paint a bearish picture, with RSI in oversold territory and MACD diverging from price. Key support levels at $44.50 and $43.50 are critical for near-term stability. The 200-day MA at $23.77 suggests a long-term downtrend, but short-term volatility offers options opportunities. Two contracts stand out:

• IREN20251212P45 (Put):
- Strike: $45, Expiry: 2025-12-12
- IV: 104.21% (high volatility), Leverage: 13.77%, Delta: -0.466 (moderate sensitivity), Theta: -0.0568 (moderate time decay), Gamma: 0.0489 (responsive to price swings), Turnover: $169,012
- Why it works: High IV and leverage amplify potential gains if the stock breaks below $45. A 5% downside scenario (to $42.83) yields a put payoff of $2.17 per share.

• IREN20251212C46 (Call):
- Strike: $46, Expiry: 2025-12-12
- IV: 109.73% (elevated), Leverage: 15.22%, Delta: 0.489 (moderate directional bias), Theta: -0.2259 (aggressive time decay), Gamma: 0.0466 (reactive to price shifts), Turnover: $357,532
- Why it works: High liquidity and leverage make this call ideal for a rebound trade. A 5% upside (to $47.34) triggers a call payoff of $1.34 per share, but theta decay risks erosion if the move is delayed.

Action Insight: Aggressive bears should prioritize IREN20251212P45 for a breakdown below $45, while bulls may test IREN20251212C46 if the stock bounces above $46.50.

Backtest IREN Stock Performance
I attempted to:1. Retrieve IREN’s daily OHLC data from 2022-01-01 to the present. 2. Identify every trading day on which that day’s low was ≥ 7 % below the previous day’s close. 3. Feed those event dates into the event-backtest engine to measure the average post-event performance.Steps 1–2 completed successfully and the event-date file was generated. However, when the event-backtest engine was launched it encountered an internal processing error (“convert_statistics” function missing), so the back-test failed.Likely causes:• The engine received an empty / invalid event-date list (e.g., no qualifying -7 % intraday plunges were detected), so it could not compute event returns. • Or the engine itself experienced a transient internal bug.Recommended next actions (please let me know how you’d like to proceed):1. Double-check the event definition – We can relax the threshold (e.g., -5 %) or use a different criterion (e.g., close-to-close drop ≥ 7 %). 2. Inspect the detected event list – I can retrieve and show you the dates we found to confirm whether it’s empty or looks reasonable. 3. Retry the event back-test after verifying the event list. 4. If the engine bug persists despite valid inputs, I can construct a custom statistical analysis manually (average returns over various horizons, hit rates, etc.) without relying on the built-in engine.How would you like to proceed?

IREN at Crossroads: Watch $44.50 Support and Sector Catalysts
IREN’s 7% drop has created a critical juncture for the stock. While the company’s capital-raising efforts aim to stabilize its balance sheet, the market’s reaction underscores skepticism about dilution and debt management. Key levels to monitor include $44.50 (psychological support) and $43.50 (next stop-loss). A rebound above $47.50 could reignite short-term optimism, but the 200-day MA at $23.77 remains a long-term bearish anchor. Meanwhile, sector leader Microsoft (MSFT) is up 1.2%, highlighting the contrast between IREN’s debt-driven struggles and the broader tech sector’s resilience. Investors should prioritize risk management, using options like IREN20251212P45 to hedge downside risks or capitalize on a potential rebound.