MARA Holdings (NASDAQ: MARA) experienced a sharp selloff on Friday, with shares tumbling 10.15% to close at $10.67. The decline erased approximately $466 million in market value, bringing the company's market capitalization to $4.07 billion. Trading volume was heavy, with 41.93 million shares changing hands, as investors digested the implications of the company's expanding use of bitcoin-backed debt.
The drop came as bitcoin prices remained relatively stable, hovering around $78,166 late Saturday, up just 0.6% from the previous close. MARA's decline far outpaced the cryptocurrency's modest gain, underscoring the stock's sensitivity to balance-sheet dynamics. Other listed miners also fell, with Riot Platforms (NASDAQ: RIOT) down 9.05%, Cipher Digital (NASDAQ: CIFR) losing 9.54%, and TeraWulf (NASDAQ: WULF) declining 6.82%.
Leverage on the Rise
MARA's second-quarter results highlighted its position as a leveraged play on bitcoin. Revenue dropped 27% year-over-year to $174.9 million, while the company reported a net loss of $611.3 million, including a $343 million digital-asset mark-to-market loss. Adjusted EBITDA swung to negative $360.9 million, compared with a positive $1.2 billion in the same period last year when higher bitcoin prices generated significant accounting gains.
As of June 30, MARA held 35,577 bitcoin, valued at roughly $2.1 billion, plus $421.3 million in cash and equivalents, totaling nearly $2.5 billion in liquid assets. That pool represents about 61% of Friday's market capitalization. However, 9,270 bitcoin—26% of total holdings—were either loaned out or used as collateral.
Post-quarter, the company secured an additional $600 million in bitcoin-backed loans at a weighted average interest rate of 7.56%, and refinanced a $150 million facility. These moves raise the company's debt load and interest obligations, which could weigh on returns if bitcoin prices decline.
AI Expansion and Capital Needs
The borrowed funds are earmarked for MARA's planned acquisition of the Long Ridge power facility, which is expected to provide an initial 200 megawatts for AI and critical computing by mid-2028, with potential to scale to 600 megawatts. The company also partnered with Starwood Digital Ventures to target roughly one gigawatt of AI capacity in the near term, with ambitions to exceed 2.5 gigawatts.
While these initiatives offer new valuation avenues, they require significant upfront capital before contracted AI revenue materializes. The shift adds execution risk, including potential delays in permits, construction, and tenant agreements.
Operational Growth Amid Profitability Squeeze
Mining operations continued to expand even as profitability softened. Energized hashrate grew 22% to 70.3 exahashes per second, and the company mined 2,422 bitcoin during the quarter. However, energy cost per coin rose 15% to $38,690, reflecting higher operational expenses.
Analyst Outlook and Risks
Analyst sentiment is mixed, with a recent consensus showing eight buy ratings, two holds, and two sells. The mean price target stands at $18.78, with a wide range from $6 to $30. Following Friday's selloff, MARA trades at roughly six times its annualized second-quarter revenue, leaving a significant gap to analyst targets.
Key risks include a further drop in bitcoin prices, which would reduce collateral values and impact reported earnings. Higher borrowing costs could also pressure returns before new AI campuses generate revenue. The next major valuation shift will likely depend on new AI contracts or improved bitcoin fundamentals.
