TeraWulf Inc. (NASDAQ: WULF) has completed a mandatory conversion of all outstanding Series A Convertible Preferred Stock into common shares. The conversion, triggered when the company’s common stock price exceeded 130% of the $10.00 conversion price for at least five trading days between November 4 and November 24, 2025, became effective on December 9, 2025, with settlement on December 11.
Under the terms of the conversion, each Series A Preferred share converts into 141.9483 common shares. With approximately 419 million common shares outstanding before the conversion, the issuance of roughly 1.215 million new shares will bring the total to about 420 million shares, diluting existing common shareholders by less than 0.3%. Fractional interests will be paid in cash at the last reported sale price of common stock on the conversion date.
TeraWulf’s financial backdrop underscores the strategic intent behind the move. In Q3 2025, the company generated $50.6 million in revenue—an 87% year‑over‑year increase—while posting a GAAP net loss of $455 million, a sharp rise from the $18.4 million loss in Q2 2025. Total debt stood near $1.5 billion as of September 30, 2025, highlighting the need for a leaner capital structure to support its pivot from Bitcoin mining to high‑performance computing and AI workloads.
Chief Financial Officer Patrick Fleury said the conversion “represents a key milestone on our journey to simplify TeraWulf’s capital structure going forward, supporting future growth while providing transparency to investors.” The move eliminates preferred dividend obligations, frees cash that can be deployed toward data‑center expansion and strategic partnerships—such as the recent AI‑workload agreement with Google—and positions the company for future capital‑raising without the drag of preferred equity.
Analysts have responded with a “Hold” rating and a $12.00 price target, while some have projected targets as high as $26, reflecting optimism about the company’s HPC and AI initiatives. The conversion is viewed as a positive step toward financial discipline, though investors remain mindful of the company’s high leverage and ongoing profitability challenges. The dilution impact is modest, and the elimination of preferred dividends is expected to improve cash flow and flexibility for future growth initiatives.
The conversion signals TeraWulf’s commitment to a streamlined equity structure that supports its strategic shift into high‑growth data‑center markets. By removing a preferred layer, the company reduces complexity for investors and lenders, potentially improving its credit profile and making future financing more attractive. The modest dilution and freed cash flow are expected to offset short‑term ownership dilution, positioning TeraWulf to capitalize on expanding HPC and AI demand while managing its debt burden.
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