Stronghold Digital Mining Swaps Debt for Preferred Stock

The bitcoin miner has been reducing its debt since the summer.

AccessTimeIconJan 3, 2023 at 1:21 p.m. UTC
Updated May 9, 2023 at 4:05 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Stronghold Digital Mining (SDIG) has agreed with noteholders to exchange $17.9 million of convertible debt for $23.1 million of convertible preferred stock, according to a press release Tuesday.

The deal is the bitcoin miner's latest effort to improve its balance sheet. In August, Stronghold announced a deal to return 26,200 mining rigs to lender NYDIG in exchange for extinguishing $67.4 million in debt. In September, the company cancelled a hosting agreement with Germany's Northern Data in an effort to improve its cash flow.

  • Celsius CEO Alex Mashinsky Owes Transparency to Creditors, Says Legal Expert
    Celsius CEO Alex Mashinsky Owes Transparency to Creditors, Says Legal Expert
  • Moody’s Downgrades Coinbase’s Debt on Profitability Concerns
    Moody’s Downgrades Coinbase’s Debt on Profitability Concerns
  • Standoff Over $28T of US Government Debt Could Rattle Bitcoin Market
    Standoff Over $28T of US Government Debt Could Rattle Bitcoin Market
  • Under the agreement announced on Tuesday, 10% convertible notes will be extinguished in exchange for a new series of convertible preferred shares that can be converted into common shares for 40 cents per share.

    If all the preferred stock is converted, about 57.8 million common shares would be issued, adding about 46% to the current common float, according to the company. Stronghold won't pay a dividend on the new preferred shares.

    With the deal, which is set to close by Feb. 20, Stronghold will have less than $55 million in debt outstanding, CEO Greg Beard said in the statement.

    At the end of 2022, Stronghold had about $12.4 million of unrestricted cash and about 6 bitcoins, which are worth about $100,000 at current prices.

    UPDATE (Jan. 3, 15:00 UTC): Adds detail about closing date and outstanding debt in fifth paragraph.


    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Eliza Gkritsi

    Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.

    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.