Keel Infrastructure Corp. saw its stock price plummet on Friday, closing at $5.13 after the company announced an upsized convertible note offering of $400 million. The move, intended to fuel its transition from bitcoin mining to artificial intelligence data centers, has raised concerns among investors already rattled by a broader tech selloff.
Market Reaction and Trading Details
Shares of Keel fell 13.49% on Friday, with a massive 113.71 million shares changing hands. The company's market capitalization now stands at approximately $3.10 billion. The decline came amid a tough session for equities, with the Nasdaq Composite dropping 4.18%, the S&P 500 losing 2.64%, and the Dow Jones Industrial Average sliding 1.35%. A stronger-than-expected U.S. jobs report prompted investors to reassess interest rate risks, further pressuring tech and AI-related stocks.
Convertible Note Offering Details
Keel priced $400 million in 1.250% convertible senior notes due 2032, up from the originally planned $350 million. The notes are convertible into shares at an initial conversion price of approximately $7.41, representing a 25% premium over the June 4 Nasdaq closing price of $5.93. The offering is expected to close around June 9, subject to market conditions. To mitigate dilution, Keel also entered into capped-call transactions.
The company plans to use the net proceeds for capped-call costs and general corporate purposes, which may include deposits on long-lead equipment or letters of credit for its data center projects in Panther Creek, Sharon, and Moses Lake.
Strategic Shift from Bitcoin to AI
Keel has been aggressively pivoting from bitcoin mining to high-performance computing (HPC) and AI data centers. In May, the company completed a rebranding effort, moved its headquarters to the U.S., exited Latin American operations, and focused entirely on North American HPC and AI markets. CEO Ben Gagnon described this as a "clear strategic vision." CFO Jonathan Mir reported liquidity of approximately $533 million.
Despite the strategic shift, Keel continues to post operating losses. First-quarter revenue came in at $37 million, down 23% year-over-year, with an operating loss of $98 million and a loss from continuing operations of $128 million, or 21 cents per share. The company also sold 269 bitcoin between January 1 and May 8, generating $20 million as part of its plan to wind down its bitcoin holdings.
Industry Context and Analyst Views
Keel is not alone in this transition. According to S&P Global Market Intelligence, other crypto miners such as IREN, TeraWulf, and Core Scientific are also pivoting to AI and HPC. Analysts expect these businesses to drive most of their revenue growth in 2026. Brian Dobson, managing director at Clear Street, noted that "2026 is the year of expanding on those contracts and, more importantly, executing on those deals."
However, the risks are substantial. The convertible notes add leverage, and conversion could dilute existing shareholders. The data center projects are subject to power availability, permits, equipment delivery, customer commitments, and construction timelines. If interest rates remain elevated, AI stocks continue to weaken, or Keel fails to secure the expected leases, Friday's selloff may not be the last.
