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SAN ANTONIO - HIVE Digital Technologies Ltd. (TSXV:HIVE) (NASDAQ:HIVE) announced Tuesday that its wholly-owned subsidiary, HIVE Bermuda 2026 Ltd., intends to offer $75 million in 0% exchangeable senior notes due 2031 through a private placement to qualified institutional buyers, according to a press release statement. The financing comes as the company, with a market capitalization of $624 million, works to strengthen its balance sheet while pursuing aggressive expansion plans.
The offering includes an option for initial purchasers to acquire an additional $15 million in notes within 13 days of issuance. The notes will be exchangeable under certain conditions, with settlements made through cash, HIVE common shares, or a combination of both at the issuer’s discretion.
The notes will be general unsecured obligations of the subsidiary, fully guaranteed by HIVE Digital Technologies Ltd. on a senior unsecured basis. The notes will not bear regular interest and the principal amount will not accrete.
HIVE plans to use net proceeds to subscribe for shares of its subsidiaries, which will allocate funds toward general corporate purposes, capital investment including graphics processing unit purchases, and data center development. The capital raise appears timely given that InvestingPro analysis suggests the stock is currently undervalued, with an InvestingPro Fair Value indicating potential upside. The company may use a portion of proceeds to reimburse costs associated with capped call transactions. According to InvestingPro Tips, HIVE is quickly burning through cash, making this capital infusion particularly significant for funding its expansion initiatives.
The company expects to enter into cash-settled capped call transactions with financial institutions to reduce potential economic dilution of common shares upon note exchanges. The stock has demonstrated significant volatility recently, posting a 17% return over the last week while experiencing a 64% decline over the past six months. These transactions are designed to offset cash payments exceeding the principal amount of exchanged notes, subject to a cap.
HIVE separately announced it received conditional approval from the Toronto Stock Exchange to list its common shares. The company must fulfill all TSX requirements by June 30, 2026. Trading is expected to shift from the TSX Venture Exchange to the TSX around April 30, 2026.
The notes and common shares issuable upon exchange have not been registered under the U.S. Securities Act of 1933.
In other recent news, Hive Digital Technologies Ltd. announced a significant expansion of its AI data center capacity in Canada. The company has increased its liquid-cooled AI data center capacity from 4 megawatts to 16.6 megawatts across Manitoba and British Columbia. This expansion is facilitated through a partnership with Bell Canada AI Fabric, and no additional capital expenditures are required due to prior deposits. On the financial front, Hive Digital reported record revenue of $93.1 million for the third quarter of fiscal 2026, marking a 219% year-over-year increase, with an adjusted EBITDA of $5.7 million.
Meanwhile, several analyst firms have adjusted their price targets for Hive Digital. Cantor Fitzgerald reduced its price target from $7.50 to $5.00, citing challenges in Bitcoin mining economics. Rosenblatt also lowered its target from $6.50 to $4.50, though it noted that Hive’s Paraguay expansion has bolstered its mining economics despite a tough hashprice environment. Additionally, H.C. Wainwright cut its price target to $7 from $10, mentioning underwhelming results for the fiscal third quarter, but highlighted the potential growth in the company’s GPU Cloud business.
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