After a big pump of 394%, suddenly financing 2 billion, IREN fell over 4% before the market: Is the panic of equity dilution coming?

Question

[Coin World] IREN( Nasdaq: IREN) fell 4.33% in pre-market today, due to the company suddenly announcing the issuance of $2 billion in convertible bonds, along with a concurrent stock offering.

The management said that the money is mainly used to pay off old debts and, by the way, to supplement working capital. Sounds like a pretty normal financial operation? But the market doesn't see it that way—investors are most afraid of dilution of equity. After all, issuing new stocks means the cake has to be shared with more people, and earnings per share will naturally be diluted.

Interestingly, IREN has actually surged this year, with an increase of nearly 394% since the beginning of the year. In this context, the sudden financing feels somewhat delicate: is it to cash out at a high point? Or is there a genuine strategic layout?

Convertible bonds are inherently a double-edged sword—they provide companies with cheap financing costs, but the conversion terms are like the sword of Damocles hanging over the shareholders' heads. Now that the stock price has corrected, it may be the market repricing this risk.

Rugman_Walking · Accepted Answer

A 394% rise to start financing, I&#39;ve seen this trap too many times, it&#39;s a typical high position cash-out.

LiquiditySurfer · Answer

Hmm... starting financing after a 394% rise, this timing is really brilliant.

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With both convertible bonds and additional issuance, investors are truly doomed this time.

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The sense of déjà vu of being played for suckers at high positions is coming; what is the management thinking?

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The cake is being cut for more people, and our retail investors&#39; shares are getting thinner...

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The sword of Damocles is hanging overhead, and convertible bonds are just ticking time bombs.

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After a 394% increase, pulling this kind of stunt will definitely lead to dumping once the market reacts.

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Financing while paying old debts? This reason sounds absurd; why not finance at a low position?

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Equity dilution can really lead to direct dumping, no wonder it plummeted before the market opened.

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It feels like the management is just cashing out this time, and everything else is just an excuse.

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The pit of convertible bonds is too deep; once converted to shares, all shareholders have to pay the price.

SillyWhale · Answer

It&#39;s the same old trick again, rising so crazily and still want to dilute equity, it&#39;s hilarious.

The taste of high-level financing and cashing out is too strong, the management really knows how to play the game.

Convertible bonds? It&#39;s just digging a pit for retail investors, anyway, in the end, we are the ones who lose.

A 394% rise followed by this move is really something.

Once the dilution expectation came out, it fell, can&#39;t blame the market, if it were me, I would run too.

ruggedSoBadLMAO · Answer

394% rise and then it starts to play people for suckers, this trap is too familiar haha

Blockblind · Answer

rise 394% and pivot to financing, this pace... is a bit too "Satoshi" don&#39;t you think?

MetaEggplant · Answer

Rise 394% and still need financing, there is a story behind this.