Summary MARA Holdings transition to building data centers has been ignored by the market still focusing on its BTC mining operations. MARA trades at a substantial discount to peers based on P/BV, despite increased capacity efforts. Existing energy capacity of 1.8 GW is greater than the current capacity of TeraWulf and IREN. MARA has shifted to a more active BTC holdings management style that offers investors better ROI and recurring income. MARA Shift to Inference Data Center Buildout For many investors, MARA Holdings has long been associated with Bitcoin mining. The Company holds ~53,000 Bitcoins, making it the second largest holder in the world. Unlike traditional crypto treasures that have issued shares and debt to fund large crypto holdings, MARA operates an expansive mining operations with over 1.8 GW of capacity. In Q3 2025, revenues increased 92% YoY to $252M. Additionally, the Company had cash and BTC holdings of ~$6.8B at the end of Q3 2025. In recent quarters, MARA has shifted its efforts to help capture the increased demand energy required from data centers. MARA Chairman & CEO opened his shareholder letter with: "We believe electrons are the new oil, and energy is becoming the defining resource of the digital economy." With 18 digital compute sites and 1.8 GW of flexible compute capacity, MARA is already prepared for providing compute power to companies. Exaion SAS Majority Investment On September 30, 2025, MARA acquired a majority ownership interest in Exaion SAS, a subsidiary of EDF Pulse Ventures, for approximately $168.0 million. The acquisition expands the Company AI infrastructure with access to 4 data centers, 83,600 CPU cores and 1,250 GPUs. The deal is still pending and is expected to close in Q4 2025 or early 2026. MPLX x MARA Holdings Partnership On November 4, 2025, MARA announced a partnership with MPLX LP (NYSE: MPLX), formed by Marathon Petroleum Corporation (NYSE: MPC), to expand the Company's access to lower-cost energy. MARA plans to build and own multiple power generating facilities and data across the Delaware Basin, utilizing MPLX's natural gas resources for long-term, low-cost energy access. Additionally, MPLX is expected to pay MARA a tolling fee of $45/MWh of electricity consumed. MARA is Trading at a Discount to Peers, Despite Data Center Potential Currently, MARA shares are trading below their book value, with a $13.68 book value and $9.94 stock price. While the Company's convertible notes and continued share issuances certainly offset some of this difference, trading over $1B below your BV is extreme, considering a potentially successful shift to data center operations. Other crypto miners turned data center operators, like TeraWulf, trade well above their book values. TeraWulf currently trades at a 26x P/BV, compared to MARA's depressed .8x P/BV. MARA Trumps TeraWulf's Existing BTC Mining Operations MARA has long been seen as one the best crypto miners amongst the many publicly traded peers that operate in this market. However, the shift to data centers by these companies has essentially eroded any superiority, measured in trading premiums. TeraWulf, as of November 2025, only had 130 MW of Bitcoin mining capacity . Even TeraWulf's "contracted" capacity is far below MARA's current operations, with 594 MW in contracted capacity, expected to come online by 2026. Bitcoin Mining Capabilities (Q3 2025 Earnings Deck) Lacking Headliner Partnerships, MARA's Capacity is Being Ignored MARA, however, has 1.8 GW of "existing" capacity, with 500MW of available capacity to be contracted out. The only reason why TeraWulf and other peers have exploded in value is because of high profile contracts. In the case of TeraWulf, the company was contracted by Fluidstack, backed by Google, to expand energy scalability. To fund this massive endeavor, TeraWulf was backed by Google, taking a 14% via warrants. Additionally, TeraWulf announced a $3.2 billion offering of 7.750% senior secured notes, due in 2030. This represents a massive, understated risk to equity holders. MARA, however, has strategically used its balance sheet and existing operations to raise capital to fund data center expansion. In July 2025, the Company announced an upsized $950 Million Offering of 0.00% Convertible Senior Notes due in 2032. With an initial conversion price of $20.2585 per share, there exists little dilution risk to investors at current share price levels. Energy-to-Value Infrastructure Enables Scalability Via Financing Being one of the largest crypto miners and holders in the world, MARA has been able to acquire large crypto holdings that has been used as collateral. Essentially, MARA is large scale energy-to-value infrastructure play, using its energy capacity to convert electrons to deployable cash. We are activating a portion of our bitcoin holdings through lending, structured trading, collateralized financing, and in-house trading to generate incremental income. As opposed to other crypto miners, like TeraWulf and IREN, MARA has been able to deploy its crypto holdings to attract investors and back needed loans for data center expansion. The deployment of this Bitcoin, as opposed to holding it, generates a better ROI for investors and proves the use case for Bitcoin as a deployable asset. Additionally, MARA has been able to use Bitcoin as collateral for lines of credit. In October 2024, the Company negotiated a $200M Line of Credit that was partially backed by its Bitcoin holdings. Higher Mining Costs Forces Quicker Transition Whether or not you agree Bitcoin has long-term value, energy and mining costs related to BTC have substantially increased, adding margin pressure to MARA and other miners. Direct energy costs to mine the actual Bitcoin for MARA were $28,801 in 2024. Some analysts of SA have estimated a total cost of mining bitcoin at ~$80,000 per coin, which offers very thin margins at current BTC levels. In September 2025, MARA liquidated 49.32% of the 736 bitcoin it mined during the month. Despite worries about the Company, I believe the compression of margins is a good thing. The "hodl" approach of mining BTC is generally a poor use of capital, something the Company has recognized as it looks to deploy more of its crypto holdings. Bitcoin Deployment (MARA Q3 2025 Update) Amongst efforts to offset increasing operating cost for its Bitcoin mining operations has been the loaning of its crypto holdings to "trusted third-parties" for the production of single-digit yield. According to management , “The long-term objective is to generate sufficient yield to offset operating expenses...” The Company generated $17.7M in interest income in Q3 2025, compared to just $3.9M in Q3 2024. While investments in data center infrastructure is the largest effort to help diversify company operations, active management of its Bitcoin helps provide incremental income to investors to offset potential dilution. Putting it All Together In summary, the market is either missing or ignoring MARA's potential to expand its data center capabilities and transforms its operating activities. Bitcoin miners like IREN, who had 810 MW of capacity in the first half of 2025, have enjoyed substantial rallies on the backs of partnerships with large technology providers. While MARA may lack Google's quasi-backing through warrants or other complex financing agreements, the Company excels in compute power with over 1.8 GW in existing capacity. TeraWulf and IREN trail behind in MARA's current operating scale. The Company operates 18 compute centers across four continents, and is backed by substantial bitcoin mining operations that provide incremental cash flows to support its data center expansion model. Normalization of P/BV Showcases Valuation Upside There has been a large convergence between IREN and MARA's P/BV, largely due to IREN's early shift and contract wins to expand its data center operations. Assuming that MARA can successfully transition part of its operating model to data center management, supported by its Exaion SAS and MPLX partnerships, the Company should warrant a P/BV of ~2x. This conservative view would imply a PPS of ~$22.5. This conservative estimate of P/BV and subsequent price appreciation shows the potential of a truly successful data center transformation. P/BV Comparison (Seeking Alpha) Considerations for Risk Share Issuances Investors face dilution and debt risk from MARA's efforts to fund its data center expansion and purchases of Bitcoin. In Q3 2025, the Company issued 14,932,762 shares, increasing its total share count to 378,601,057. Additionally, management redeemed 1,849,707 of shares through redemption of RSUs. I expect these issuances to continue, which will slowly dilute investors over the long-term. Benefit of August 2032 Notes In 2025, MARA issued ~$1B of August 2032 senior unsecured obligations, or convertible notes, with a 0% interest. The August 2032 Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 49.3619 shares for every $1,000 of bond principal. Luckily for investors, the bonds were issued prior to MARA's ~50% stock decline. MARA Debt Overview (MARA 10-Q) With a conversion price of $20.2585, shares would need to appreciate over 100% to pose any immediate dilution effect. However, redemption is only available after January 15, 2030. By then, if shares are higher than the conversion price, which I think they will be, MARA can avoid paying the principal value of this debt and incur some dilutive impact, after factoring in capped call transactions. Electrons are the New Oil To conclude this article, I want to return to MARA CEO Fred Thiel's opening words of his letter to shareholders: "We believe electrons are the new oil, and energy is becoming the defining resource of the digital economy." MARA, despite being late to the data center transformation play, already has 1.8 GW of existing capacity and partnerships to expand such capacity powered by cost-effective energy in the Delaware Basin. The market has totally ignored these efforts and shares are now trading below P/BV, despite a strong crypto portfolio and an existing capacity advantage over crypto mining peers. For these reasons, MARA is a buy .
