- MARA Holdings stock jumped after the company sold its Bitcoins.
- The company has repurchased its convertible senior notes due 2030 and 2031.
- Technical analysis suggests that the MARA stock will likely retreat.
MARA stock price jumped by nearly 10% on Thursday, as the company announced plans to sell its Bitcoin as its pivot to artificial intelligence (AI) continued. It rose to $8.95, up by 35% from its lowest level this year.
MARA Holdings is Continuing its Pivot to AI
Like other companies in the Bitcoin mining industry, MARA Holdings is accelerating its pivot to the artificial intelligence industry, mirroring a performance that started with CoreWeave. Other companies like TeraWulf, IREN, and Riot Platforms have also pivoted to the industry that is today’s fastest-growing.
In a statement, MARA Holdings said that it sold 15,133 Bitcoin holdings worth over $1.1 billion. It used the funds to repurchase its convertible notes. As a result, it reduced its total outstanding notes to $2.297 billion from $3.29 billion in December last year.
MARA Holdings aims to become a major player in the data center industry, which analysts expect will continue to grow in the coming months. For example, the top four technology companies in the United States plan to spend over $650 billion in capital expenditure this year.
The company recently inked a major partnership with Starwood Digital Ventures, a company owned by billionaire Barry Sternlicht. This deal will see the two companies develop, finance, and operate large data centers in the industry. MARA will have the option to invest up to 50% in the joint venture.
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This market has become highly exciting recently. For example, Meta Platforms entered an AI infrastructure $27 billion deal with neocloud specialist Nebius Group, while Microsoft entered a $9.7 billion deal with IREN. CoreWeave also has a backlog of over $50 billion.
The challenge, however, is that it is a highly capital-intensive industry, with CoreWeave planning to spend over $30 billion in capital expenditure this year. Also, there is a challenge: the industry is becoming highly saturated, with companies like Bitfarms and Riot moving in.
MARA Holdings’ pivot to the AI data center industry comes at a time when Bitcoin price remains in a bear market and mining difficulty continues to rise.
The most recent results showed that the company produced 2,011 Bitcoin in the fourth quarter, down by 6% from 2,144 in the third quarter. It produced 8,799 coins last year, down from 9,430 a year earlier. It also made a net loss of over $1.7 billion in Q4 as the Bitcoin price crashed.
MARA Stock Price Technical Analysis
The daily timeframe chart shows that MARA stock has crashed over the past few months, falling from last year’s high of $23.50 in October to the current $8.82.
Most recently, the stock has formed an ascending channel and is now inside it. It remains slightly below the crucial resistance level at $9.78, its lowest level in April last year.
MARA stock has remained below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bears remain in control.
The stock has formed a bearish flag pattern, a common continuation sign in technical analysis. Therefore, the stock will resume the downward trend, potentially to the year-to-date low of $6.67, which is about 25% below the current level.
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