1/ 🧵
CleanSpark $CLSK announced a $1B convertible note offering (up to $1.2B).
But the headline isn’t the raise, it’s the structure.
Up to $400M of proceeds are being used to buy back shares immediately.
This move changes the entire supply/demand profile of CLSK.
Let’s break down what we know and why it matters. 👇
CleanSpark $CLSK announced a $1B convertible note offering (up to $1.2B).
But the headline isn’t the raise, it’s the structure.
Up to $400M of proceeds are being used to buy back shares immediately.
This move changes the entire supply/demand profile of CLSK.
Let’s break down what we know and why it matters. 👇
2/
At a $15 share price, a $400M repurchase removes roughly:
$400M ÷ $15 = ~26.7 million shares
$CLSK currently has a float around ~272M.
This buyback retires roughly:
~10% of the public float
A 10% float reduction in one move is enormous… especially in a mining stock.
At a $15 share price, a $400M repurchase removes roughly:
$400M ÷ $15 = ~26.7 million shares
$CLSK currently has a float around ~272M.
This buyback retires roughly:
~10% of the public float
A 10% float reduction in one move is enormous… especially in a mining stock.
3/
When the float shrinks, two things happen instantly:
(A) Less supply to trade
(B) Less supply to borrow
Short sellers depend on both.
Removing ~27M shares tightens liquidity, raises borrow costs, and compresses available inventory across prime brokers.
That alone hurts shorts.
But CleanSpark didn’t stop there.
When the float shrinks, two things happen instantly:
(A) Less supply to trade
(B) Less supply to borrow
Short sellers depend on both.
Removing ~27M shares tightens liquidity, raises borrow costs, and compresses available inventory across prime brokers.
That alone hurts shorts.
But CleanSpark didn’t stop there.
4/
This is a convertible note deal.
Convertible funds always hedge by shorting the stock as an insurance.
That’s standard: long the note, short the equity.
In a normal $1B+ convertible offering, the stock gets hit with a wall of hedging shorts.
But CleanSpark countered the hedge before it could even start.
This is a convertible note deal.
Convertible funds always hedge by shorting the stock as an insurance.
That’s standard: long the note, short the equity.
In a normal $1B+ convertible offering, the stock gets hit with a wall of hedging shorts.
But CleanSpark countered the hedge before it could even start.
5/
By committing $400M to an immediate buyback, executed simultaneously with the pricing of the converts, $CLSK essentially pulls 10% of the float off the board at the same moment investors want to short.
Result:
▪️ Reduces borrow availability
▪️ Reduces liquidity
▪️ Raises the cost of shorting
▪️ Makes it harder for funds to establish full-size hedges
▪️Lower natural short-selling flow
This isn’t a coincidence, it’s engineered.
CleanSpark just positioned the order book in their favor.
By committing $400M to an immediate buyback, executed simultaneously with the pricing of the converts, $CLSK essentially pulls 10% of the float off the board at the same moment investors want to short.
Result:
▪️ Reduces borrow availability
▪️ Reduces liquidity
▪️ Raises the cost of shorting
▪️ Makes it harder for funds to establish full-size hedges
▪️Lower natural short-selling flow
This isn’t a coincidence, it’s engineered.
CleanSpark just positioned the order book in their favor.
6/
So here’s the dynamic in simple terms:
Normal convertible financing
↓
Hedge funds aggressively short → price drops → valuation compresses
CleanSpark’s move
↓
Company retires 10% of the float → hedgers can’t short at full size → borrow tightens → downward pressure evaporates
A mining company executing a defensive, anti-dilution, anti-short structure is rare.
This pushes natural equilibrium up, not down.
$CLSK flipped the script.
So here’s the dynamic in simple terms:
Normal convertible financing
↓
Hedge funds aggressively short → price drops → valuation compresses
CleanSpark’s move
↓
Company retires 10% of the float → hedgers can’t short at full size → borrow tightens → downward pressure evaporates
A mining company executing a defensive, anti-dilution, anti-short structure is rare.
This pushes natural equilibrium up, not down.
$CLSK flipped the script.
7/
Here’s where it gets even more interesting:
Even though hedge funds may want to short to hedge the $1.2B convert, they’ll face:
▪️ Higher borrow fees
▪️ Less size available
▪️ Risk of forced covering
▪️ More derivative hedging
▪️ Slower execution over time
▪️ Less total impact on the stock price
This removes the classic “convertible wall of shorts” that normally smashes a stock during a raise.
That benefits every long shareholder
Here’s where it gets even more interesting:
Even though hedge funds may want to short to hedge the $1.2B convert, they’ll face:
▪️ Higher borrow fees
▪️ Less size available
▪️ Risk of forced covering
▪️ More derivative hedging
▪️ Slower execution over time
▪️ Less total impact on the stock price
This removes the classic “convertible wall of shorts” that normally smashes a stock during a raise.
That benefits every long shareholder
8/
The end result is powerful and benefits CleanSpark shareholders through:
✅ Reduced dilution impact
Buyback offsets future conversion.
✅ Tighter float
27M shares gone → reduced borrow availability.
✅ Reduced shorting capacity
Lower borrow availability increases squeeze risk.
✅ Higher squeeze risk
When a float goes from 272M → 245M, the balance of power shifts.
✅ Improved per-share metrics
EPS, book value, and BTC per share go up.
✅ Shareholder-friendly capital strategy
Signaling from management is strong.
This structure helps longs today and protects them later.
The end result is powerful and benefits CleanSpark shareholders through:
✅ Reduced dilution impact
Buyback offsets future conversion.
✅ Tighter float
27M shares gone → reduced borrow availability.
✅ Reduced shorting capacity
Lower borrow availability increases squeeze risk.
✅ Higher squeeze risk
When a float goes from 272M → 245M, the balance of power shifts.
✅ Improved per-share metrics
EPS, book value, and BTC per share go up.
✅ Shareholder-friendly capital strategy
Signaling from management is strong.
This structure helps longs today and protects them later.
9/
This is a sophisticated capital markets move.
CleanSpark isn’t just raising money, they’re shaping how that raise impacts the trading dynamics of their stock.
A 10% float reduction combined with a $1.2B capital injection shifts the entire supply/demand curve in favor of shareholders, not shorts.
The market hasn’t fully priced in what this means.
This is a sophisticated capital markets move.
CleanSpark isn’t just raising money, they’re shaping how that raise impacts the trading dynamics of their stock.
A 10% float reduction combined with a $1.2B capital injection shifts the entire supply/demand curve in favor of shareholders, not shorts.
The market hasn’t fully priced in what this means.
10/ all in all:
$CLSK eliminated ~10% of its float at $15/share at the same time institutions wanted to short the stock to hedge a $1.2B convert.
Result?
✅ Fewer shares to borrow
✅ More expensive to short
✅ Less hedging pressure
✅ Higher squeeze potential
✅ Reduced future dilution
✅ Better per-share economics
A capital raise that actually strengthens the stock.
$CLSK eliminated ~10% of its float at $15/share at the same time institutions wanted to short the stock to hedge a $1.2B convert.
Result?
✅ Fewer shares to borrow
✅ More expensive to short
✅ Less hedging pressure
✅ Higher squeeze potential
✅ Reduced future dilution
✅ Better per-share economics
A capital raise that actually strengthens the stock.
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