Shares of data-center operator TeraWulf eased Tuesday morning after extending their rally on Monday, after the company announced an upsizing and pricing of a $850 million debt offering.
Late Monday, TeraWulf said the net proceeds will be used to finance a portion of the company's data center expansion and for general corporate purposes. On Monday, TeraWulf had said it will issue $400 million in convertible senior notes.
The announcement follows news Monday that Alphabet's Google quickly raised its stake in the company, while Google-backed Fluidstack said it will expand a data center campus.
Fluidstack exercised its option to expand at TeraWulf's Lake Mariner data center campus in Western New York, where it will build a new data center due to start operations in the second half of 2026.
As part of the deal, Google will provide an incremental backstop of $1.4 billion to support debt financing. In exchange, Google is getting warrants for 32.5 million shares of TeraWulf stock.
Google had already agreed to backstop $1.8 billion of Fluidstack's lease obligations to support the buildout and debt financing. In return, Google acquired about 41 million shares of TeraWulf, giving it about an 8% stake in the company.
With Monday's incremental deal, Google's total backstop increases to about $3.2 billion, and its total pro forma equity ownership in TeraWulf climbs to about 14%.
Fluidstack's expansion adds to the AI-optimized data center capacity at Lake Mariner. TeraWulf, initially a bitcoin miner, is expanding into ownership and operation of industrial-scale data centers, tailored for high-performance computational hosting and bitcoin mining.
Fluidstack builds and operates high-performance GPU clusters, part of the technology used in data centers.
Analyst Target Hike, Upgrade On Google Deal
A Tuesday morning note from Cantor Fitzgerald pointed to additional upside in TeraWulf stock and raised the firm's price target on WULF shares from 11 to 14, almost 53% above where thee stock ended on Monday.
B. Riley on Monday raised its price target on TeraWulf to 14 from 8 and kept a buy rating, citing the latest deal. The analyst said any further announcements on financing should serve as the most meaningful catalysts in the near term, TheFly.com reported.
TeraWulf stock jumped more than 15% Monday morning, to the highest point since March 2022. The stock cleared a 10-month consolidation with a previous high of 9.30.
Monday's rally added to a 65% two-day run after TeraWulf announced a 10-year AI hosting deal with Fluidstack, while Google took a stake in TeraWulf as it helps fund data center projects. The stock Tuesday morning was down 6%, but still up more than 70% for the month.
