TeraWulf Raises $850M in Note Sale to Fund Data Center Expansion with Google Partnership.

TeraWulf Inc. is raising $850M through a convertible note sale, coinciding with a strategic partnership with Google-backed FluidStack. The financial maneuver aims to expand digital asset mining capabilities and infrastructure in the US market. TeraWulf's stock volatility has followed the announcement, with some proceeds reserved for data center expansion and potential shareholder dilution. Google's backing bolsters potential financial outcomes, highlighting a targeted approach to sustainable data center growth.

TeraWulf Inc. (Nasdaq: WULF), a leading owner and operator of vertically integrated, predominantly zero-carbon digital infrastructure, has announced the upsize and pricing of its offering of $850 million aggregate principal amount of 1.00% Convertible Senior Notes due 2031. The offering, which is expected to close on August 20, 2025, subject to customary closing conditions, is being sold in a private placement to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended [1].

The Convertible Notes will be senior unsecured obligations of the Company and will accrue interest at a rate of 1.00% per annum, payable semi-annually in arrears. The notes will mature on September 1, 2031, unless earlier repurchased, redeemed, or converted in accordance with their terms. The proceeds from the offering are expected to total approximately $828.7 million, with the remaining net proceeds to be used to finance a portion of the Company’s data center expansion and for general corporate purposes [1].

The offering coincides with a strategic partnership with Google-backed FluidStack, aiming to expand digital asset mining capabilities and infrastructure in the US market. The partnership is expected to bolster TeraWulf's financial outcomes and support its targeted approach to sustainable data center growth. TeraWulf's stock volatility has followed the announcement, with some proceeds reserved for data center expansion and potential shareholder dilution [2].

TeraWulf's convertible notes offer a 13-day option for initial purchasers to purchase up to an additional $150 million aggregate principal amount. The notes are convertible into cash, shares of common stock, or a combination of both, with an initial conversion rate of 80.4602 shares of common stock per $1,000 principal amount. The notes will be sold at a 32.50% conversion premium to the closing sale price of TeraWulf’s common stock on August 18, 2025 [1].

In connection with the pricing of the Convertible Notes, TeraWulf has entered into privately negotiated capped call transactions with certain financial institutions. These transactions are expected to reduce potential dilution to the common stock upon conversion of any Convertible Notes and offset any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes [1].

The Company's ability to elect to settle conversions in shares of common stock will be subject to its receipt of stockholder approval for an increase in the number of the Company’s authorized shares of common stock. The conversion rate will be subject to adjustment in certain circumstances and will be increased upon conversion in connection with certain corporate events or a notice of redemption [1].

The Convertible Notes and any shares of common stock issuable upon conversion of the Convertible Notes, if any, have not been registered under the Securities Act, securities laws of any other jurisdiction, and the Convertible Notes and such shares of common stock may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and any applicable state securities laws [1].

The offering of Convertible Notes is expected to close on August 20, 2025, subject to satisfaction of customary closing conditions. The Company anticipates that the aggregate net proceeds from the offering will be approximately $828.7 million (or approximately $975.2 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by TeraWulf [1].

References:
[1] https://investors.terawulf.com/news-events/press-releases/detail/116/terawulf-inc-announces-upsize-and-pricing-of-850-million
[2] Provided writing topic