Why Marathon Digital Stock Plummeted More Than 20% Today
Shares of cryptocurrency miner Marathon Digital Holdings (NASDAQ: MARA) had sunk more than 20% by late afternoon on Monday, erasing nearly all the gains it had seen since the beginning of the month in one fell swoop.
Since Marathon is predominantly a Bitcoin (CRYPTO: BTC) miner, this rising cryptocurrency price environment has been bullish for the stock. Investors tend to view cryptocurrency miners as leveraged ways to play momentum in digital token prices. Similar to precious metals miners, cryptocurrency mining companies offer investors leverage to underlying commodity prices in a way that can amplify returns.
But today's price action appears to have little to do with where cryptocurrency prices are. Rather, investors appear to be factoring in a large capital raise that the company announced today.
Source Fool.com
