TeraWulf Plummets 8.8% Amid $3.2B Debt Offering Frenzy – What’s Brewing in the Data Center Expansion?

Summary
• TeraWulf (WULF) plunges 8.8% to $11.98, erasing $1.16 from its intraday high of $13.53
• $3.2B senior secured notes offering announced to fund New York data center expansion
• Analysts split between 'Moderate Buy' and 'Junk' warnings amid leveraged AI pivot

The stock’s sharp decline reflects market jitters over TeraWulf’s aggressive $3.2B debt offering to accelerate its Lake Mariner data center project. While the move signals institutional validation from Google’s $1.8B lease backstop, the leveraged expansion has triggered volatility. With a 52-week high of $16.19 and a dynamic PE of -30.6x, the stock’s technicals and fundamentals are at a crossroads.

Debt-Fueled AI Pivot Sparks Volatility
TeraWulf’s 8.8% intraday drop stems from mixed reactions to its $3.2B senior secured notes offering, secured by first-priority liens on its assets and backed by subsidiary guarantees. While the offering aims to accelerate its Lake Mariner data center expansion—a strategic pivot toward AI and HPC—investors are wary of the increased leverage. The debt, maturing in 2030, is conditional on market conditions, creating execution risk. Additionally, critical coverage labeling the move 'junk' and concerns over refinancing pressures have amplified sell-offs. The stock’s sharp pullback from its 12-month high underscores the market’s skepticism about the company’s ability to balance growth with debt sustainability.

Options Playbook: Capitalizing on Volatility with WULF20251031P12.5 and WULF20251031P13
• 200-day average: $5.80 (far below current price)
• RSI: 62.6 (neutral zone)
• MACD: 1.02 (bullish divergence with signal line at 1.08)
• Bollinger Bands: Current price at $11.98 (near lower band at $9.88)

Technical indicators suggest a short-term bearish trend but a long-term bullish setup. Key support levels at $10.89 (30D) and $4.89 (200D) could dictate near-term direction. The stock’s 10.2% turnover rate and 10.2% turnover rate highlight liquidity risks, while the 111.1% price change ratio on the WULF20251031P11.5 put option signals aggressive bearish positioning.

Top Options Picks:
• WULF20251031P12.5
- Strike: $12.50 | Expiration: 2025-10-31 | IV: 111.90% | Leverage: 10.57% | Delta: -0.5396 | Theta: -0.013883 | Gamma: 0.177866 | Turnover: 24,607
- IV (high volatility): Suggests significant price swings expected
- Delta (moderate): Balances directional risk and reward
- Gamma (high): Sensitive to price movements, ideal for volatile setups
- Turnover (high): Ensures liquidity for entry/exit
- Payoff at 5% downside (ST = $11.38): $1.12 per contract
- Why it stands out: Combines high gamma and moderate delta for leveraged bearish exposure with manageable time decay.

• WULF20251031P13
- Strike: $13.00 | Expiration: 2025-10-31 | IV: 107.19% | Leverage: 8.43% | Delta: -0.630382 | Theta: -0.004422 | Gamma: 0.176550 | Turnover: 19,075
- IV (high): Reflects market anticipation of volatility
- Delta (high): Strong directional bias for bearish moves
- Gamma (high): Amplifies gains in a falling market
- Turnover (high): Ensures trade execution flexibility
- Payoff at 5% downside (ST = $11.38): $1.62 per contract
- Why it stands out: High delta and gamma make it ideal for aggressive short-side bets amid expected volatility.

Trading Insight: Aggressive bears should prioritize WULF20251031P12.5 for a 10.57% leverage play with high gamma sensitivity. If $11.86 support breaks, WULF20251031P13 offers amplified downside capture.

Backtest TeraWulf Stock Performance
Unfortunately, I wasn’t able to generate any valid “-9 % intraday plunge” event dates from the daily dataset I retrieved, so the back-test engine returned an error (it tried to calculate statistics on an empty list).What happened 1. The file I pulled contains daily MA and some other derived fields, but it does not include the day’s intraday low, which is required to check “Low ≤ prior-close × 0.91”. 2. Because no valid plunges were detected, the date list was empty and the engine divided by zero when it tried to compute event returns.How we can fix it A. Use a daily close-to-close definition instead (days where the closing price is ≥ 9 % below the previous close). This can be done immediately with the data already retrieved. B. Retrieve an intraday (minute or at least OHLCV) dataset that contains the Low price so we can detect true intraday plunges, then regenerate the event list. C. If you already have specific dates in mind, just paste them and I can run the event back-test directly.Please let me know which option you prefer (A, B, or C).

TeraWulf at Crossroads: Watch for $10.89 Support Breakdown
TeraWulf’s 8.8% drop reflects market uncertainty over its leveraged AI expansion, but technicals hint at a potential rebound from key support levels. The stock’s 62.6 RSI and divergent MACD suggest short-term oversold conditions, though the -30.6x PE and $3.2B debt load remain risks. Investors should monitor the $10.89 (30D) and $4.89 (200D) support levels—breakdowns could trigger further selloffs. Meanwhile, sector leader Equinix (EQIX) rose 0.2%, signaling broader data center resilience. For now, short-term bears have tools to capitalize on volatility, but long-term bulls must wait for execution clarity on the Lake Mariner project. Action: Watch for a breakdown below $10.89 or a rebound above $13.53 intraday high to confirm direction.