BlackGoat updated the narrative for IREN

IREN Update: Fair Value Touched and a Brilliantly Structured Raise

What a morning. If you’ve been following the markets, we’ve seen sharp drops, liquidations, and rebounds over tariff concerns in just the past 48 hours. Yet amid all that volatility, IREN kept trending higher and briefly hit my Fair Value estimate of $72/share: a major milestone for the thesis we’ve been tracking.

But that wasn’t even the biggest news. The company has just closed a $1.0 billion convertible note offering, and from the research I’ve done, it looks like a smartly structured financing move that puts IREN in a very strong position going forward.

Here’s why this deal is such a win for shareholders.

The Raise: $1.0 Billion with Surging Demand

• Oversubscribed offering: IREN initially aimed to raise $875m but increased it to $1.0b after strong institutional demand.
• Net proceeds: Around $979m after fees, a near billion-dollar cash to use to expand!
• What it means: Institutions are lining up to fund IREN’s next growth phase, showing deep confidence in its strategy and positioning in the AI/data center space.

My take?

🟢 Bullish: This gives IREN huge financial firepower for expansion, without giving up control or immediate equity.

The Terms: A 0% Coupon and Full Control

• 0.00% coupon: Zero interest. IREN pays nothing until the notes mature in 2031.
• No put option: Investors can’t force early repayment.

My take?

🟢 Bullish: That’s effectively an interest-free loan for six years, leaving cash flow untouched and fully reinvestable in growth.

The Dilution Shield: Brilliantly Engineered

• 42.5% conversion premium: The notes only convert if the share price climbs over 42.5% from today’s level: meaning no near-term dilution.
• Capped call up to $120.18/share (100% premium): IREN also bought an option structure that raises the effective conversion price to double the current share price.

My take?

🟢 Bullish: This is a textbook example of shareholder friendly financing. It locks in funding now, while protecting equity holders until the stock doubles. Seems fair to me.

Wait, I’ve seen this before…

All of this sounds very positive, but wait... there’s a potential catch.

Convertible notes are debt that can later be converted into stock. Investors who buy these notes often hedge their position by shorting the stock to lock in a low-risk profit (this is called convertible arbitrage).

Here’s how it works:

• A hedge fund buys $10M of IREN’s convertible notes.
• To hedge, they short $10M worth of IREN shares.
• If IREN’s stock falls, their short makes money.
• If the stock rises, their convertible note gains value (since it can be converted to shares at a higher price).

→ Either way, they’re protected, but their shorting can create downward pressure on the stock in the short term.

This is exactly what happened with Strategy (MSTR). They issued a lot of convertible debt, and arbitrage funds that bought it shorted the stock heavily, temporarily dragging down performance, even though the financing itself was fundamentally positive.

So is this actually bullish?

Well, IREN’s CEO Dan Roberts commented this morning on X:

“Strong long-only order book.”

Assuming that’s accurate, it means the buyers weren’t hedge funds playing arbitrage, but institutional investors who plan to hold the notes and aren’t shorting the stock.

Why this matters:

• Less artificial selling pressure from hedging.
• Higher-quality demand from investors who actually want exposure to IREN’s upside.
• Supports the strong terms (0% coupon, no put, 100% premium), you usually don’t get those unless long-term funds are buying.

Considering IREN’s unique position (they own the land, the data centers, energy deals, and GPUs) it wouldn’t surprise me if we’re actually seeing institutions buy for the long term, not speculative hedge funds.

The Takeaway

This deal gives IREN nearly $1B in growth capital, 0% cost of debt, and no dilution until $120/share. It’s a rare combination of financial discipline and strategic boldness, exactly the kind of structure you’d expect from a company confident in its trajectory.

I have full confidence the company will put this capital to good use. Since I started following them over a year ago, IREN has consistently overdelivered. The Roberts brothers aren’t just some founders in a garage mining bitcoin; they are executives with deep expertise in infrastructure financing, with the foresight to use bitcoin mining as a way to bootstrap their AI business.

At $72/share, I applaud what they’ve achieved. But what they’ve got now is more than just funding: it’s a signal of where IREN is heading. Institutional demand, pristine terms, and a strong balance sheet set the stage for the next leg of growth in AI and energy infrastructure.

In terms of Fair Value, I’ve increased it from $72 to $89.

Considering market sentiment, I wouldn’t be surprised if it touches that before Christmas, though I’m also mindful of potential drops. In any case, the last few days have shown that IREN can be resilient during volatility.

This is why knowing what you’re holding matters. IREN isn’t just another bitcoin miner signalling a future AI transition without follow-through, in the last 12 months, they’ve proven they’re going full steam ahead, with everything in place to succeed.

Upwards and onwards.