The XRP-powered blockchain ecosystem made headlines as TeraWulf’s momentum slowed following its announcement of a significant $850 million convertible note sale, despite the recent surge linked to a major deal with Google-backed FluidStack.

Convertible Note Sale Supports Data Center Expansion

TeraWulf (WULF), a blockchain-integrated data center company, revealed plans to scale its infrastructure through an expanded fundraising approach. The company increased its convertible debt offering to $850 million. Slated to mature in 2031, the notes offer a modest 1% annual interest and can be converted into stock, cash, or both, at TeraWulf’s discretion. This financial tool gives the company flexibility while minimizing the impact of equity dilution.

The initial conversion price, set at $12.43 per share, reflects a 32.5% upside compared to the previous week’s closing stock price. From the planned capital raise, an estimated $828.7 million in net proceeds will be available. Notably, $85.5 million is dedicated to capped call transactions to mitigate the dilution of shareholder ownership. Investors also have a 13-day option period to expand the deal by an additional $150 million. The transaction is poised to close by the end of the week.

Market Reaction to Fundraising Announcement

The announcement led to a short-term pullback in stock performance. TeraWulf’s shares dropped by 5%, slipping below the $9 mark after peaking at $10.70 on Monday. This decline came on the heels of a remarkable rally sparked by its recent strategic alignment with FluidStack.

Strategic Partnership with FluidStack and Google’s Involvement

TeraWulf’s surge earlier in the week was fueled by a partnership with FluidStack, an AI-oriented cloud platform supported by tech behemoth Google. Under the terms of a decade-long hosting agreement, FluidStack will enhance its capabilities through expansion at TeraWulf’s Lake Mariner facility in New York.

The Lake Mariner facility in New York is set for further development under the FluidStack partnership.

Backed by Google’s expanded $1.4 billion debt commitment, the joint venture underscores growing confidence in the blockchain-based data infrastructure space. Google’s involvement deepens with warrants giving it a 14% equity foothold in TeraWulf, enhancing the perceived stability and potential of the firm’s long-term operations.

Investment-Ready Infrastructure with Blockchain Backbone

This development strengthens market sentiment around data centers and blockchain infrastructure providers that leverage energy efficiency and AI compatibility. TeraWulf’s utility-scale data centers already offer competitively priced energy for mining and computing tasks, and this strategic funding round is likely to propel its capabilities even further.

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Read more: TeraWulf Adds Another 10% as Google Lifts Stake