Bitdeer's New $300 Million Convertible Note Offering Amplifies Dilution and Cash Flow Concerns

What happened

Bitdeer Technologies announced a proposed private placement of $300 million in convertible senior notes due 2032, with an option for an additional $45 million, targeting qualified institutional buyers. This move follows repeated capital raises in 2025, including $400 million in convertible notes and equity offerings, as highlighted in the DeepValue master report, which rates the stock as 'POTENTIAL SELL'. The company's deeply negative free cash flow of approximately -$460 million in the latest period necessitates ongoing external financing, underscoring its reliance on capital markets rather than internal cash generation. The DeepValue report emphasizes dilution risks and unproven AI/HPC revenue traction, with AI ARR at only ~$8 million in Q3 2025, far from management's optimistic targets. This new offering reinforces the bearish outlook by signaling continued shareholder dilution and financial strain unless AI execution improves dramatically.

Implication

Investors should anticipate further equity dilution upon conversion of the notes, potentially eroding per-share value and exacerbating the stock's 50% decline over the past year. This capital raise may fund AI/HPC expansion, but the segment's revenue remains minimal at $1.8 million in Q3 2025, failing to offset mining cyclicality. The offering could trigger stock price volatility, mirroring past double-digit declines on similar financing announcements, as noted in the DeepValue report's market sentiment analysis. It underscores the risk that Bitdeer's aggressive growth strategy is financed at the expense of shareholder equity, with no margin of safety given negative earnings and complex derivatives. Ultimately, this move aligns with the report's downside scenarios, where funding stress and AI under-delivery could justify exiting the equity from a value-investing perspective.

Thesis delta

The new convertible note offering does not fundamentally shift the investment thesis but confirms the ongoing dilution and cash flow challenges highlighted in the DeepValue report. It increases the urgency for Bitdeer to demonstrate AI/HPC revenue growth exceeding $50-100 million by end-2026 to justify capital market reliance. Failure to meet these milestones could accelerate the bear scenario, where capital impairment becomes likely due to tightened financing or stagnant AI traction.