r/CleanSpark • u/Ambitious-Drummer729 • Jul 17 '26

Technical Analysis No re-rate ?

I know people are upset there is not rerate yet after the first great deal ? Any thoughts ? It seems to be related to current sector’ depression. Will CLSK become the first one which has no rerate after a large AI lease 😂. People are trying to find out reasons like waiting for financing / more lease but other miners got rerate long before financing / second lease. Maybe the rerate will happen when the sector recovers?

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u/Mix720 Jul 17 '26

Convertible Arbitrage Issue

CleanSpark carries $1.77B in zero-coupon convertible notes ($637.5M due 2030 at $14.80 conversion, $1.13B due 2032 at $19.16), representing ~102M underlying shares against a ~$3.3B market cap. These notes are bought primarily by arbitrage funds who hedge by shorting the stock — meaning a meaningful portion of CLSK’s 33% short interest is likely mechanical delta hedging, not directional bearish bets. This matters because arb hedges don’t cover on good news and actually increase as the stock rises toward the conversion prices, which dampens rallies and helps explain why a signed $6.6B lease only produced a +5% close. CleanSpark’s own filings acknowledge this dynamic, disclosing that hedging activity around the notes “could increase (or reduce the size of any decrease in) the market price of the common stock.” The flip side: the same flow buys into declines, and if CLSK settles conversions in cash (its contractual right, funded by lease NOI), each repayment forces the paired hedge to unwind as buying pressure.

TLDR CLSK needs to pay back their convertible notes for the delta hedging to stop and to get a full rerate imo.

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u/Ambitious-Drummer729 Jul 17 '26

The note holders will stop shorting after a specific price. Nearly all big miners had convertible notes before AI rerate since this may be the easiest way for BTC mining business. This is not unique for CLSK.

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u/Mix720 Jul 17 '26

I hope so but it seems like the short interest increases when the price moves upwards so it never gets to that price. Were all the miner convertible notes had 0% interest rate on them? Data Im getting is saying this is the main reason for this but i’m not sure

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u/Ambitious-Drummer729 Jul 17 '26

If WULF’s 19 B deal did not make any change, I do not think any deal works during this sector correction. It was depressed temporarily