Jane Street and Citadel each crossed 5% of Cipher Digital in the week it sold $850 million of 0% notes
Cipher Digital sold $850 million of 0% convertible notes, and October 21 filings show Jane Street and Kenneth Griffin's Citadel entities each hold more than 5% of the stock, built during deal week. The counterparties to the miner-turned-AI-landlord's bet are now on record before the November 2 earnings print.
Richard Tang · 3 min read
Cipher Digital−11.28% — Cipher Digital, down 11.28 percent today sold $850 million of convertible notes at 0% interest, pricing them on October 14 and settling on October 16, and filings released on October 21 name who stands on the other side of that trade: Jane Street and Kenneth Griffin's Citadel entities, each reporting more than 5% of the stock. 136 The notes pay no regular interest and the principal does not accrete, which suggests the buyers expect their return from conversion into shares rather than from the coupon; the filings themselves do not state a motive. 6 Cipher Digital, the former bitcoin miner now converting itself into a landlord for AI data centers, set the conversion price at about $15.31, a 35% premium over the $11.34 close on October 13, the day the deal was announced. 6
Within days, three Schedule 13Gs, the filings institutions use to report passive stakes of 5% or more, put both houses on record. 13
The filings line up with deal week
The timing is the tell. Jane Street's parent-level stake stood at 3.0% at the September 30 event date; by its October 15 event date, the day before the notes settled, it reported 22,350,232 shares, 5.4%. 12 That is a build of roughly 9.85 million shares across the week the deal was proposed and priced 12.
Citadel's event date is October 14, the pricing day, with Kenneth Griffin, the head of Citadel, deemed to hold about 22.9 million shares, 5.5%. 3 All reported positions are as of the October 21 market open; the event dates mark when the positions crossed the reporting threshold, not when they were measured. 13 The Citadel filing also states the shares may include instruments exercisable for or convertible into shares. 3 These are passive filings, not control bids; what they record is the financing trade.
Jane Street's stake grew from 3.0% to 5.4% in the two weeks before the notes issued
Data
| Value | |
|---|---|
| Jane Street, Sep 30 | 3 |
| Jane Street, Oct 15 | 5.4 |
| Griffin | 5.5 |
| Citadel Sec Group/GP | 5.5 |
| Citadel Securities LLC | 4.3 |
The bet is on rent that has not arrived yet
The bet is on rent, not the business as reported. Cipher Digital's revenue fell to $24.8 million last quarter and the stock has lost 63.7% in three months. 5
What holders are positioned for is the roughly $793 million of average annualized net operating income management says its three campus leases should generate over ten years, with the first Black Pearl capacity delivered ahead of schedule in August and Barber Lake's first rent expected to begin in the fourth quarter. 57 The new notes' proceeds go largely to that build: about $89.7 million to capped calls that limit dilution, with the rest to the Barber Lake equity commitment and the wider HPC pipeline. 6
The conversion price of about $15.31 sits well above a stock that has since fallen further, so the notes only pay if the recovery is real. 6 The dilution is priced in advance: a 0% yield means shareholders fund the carry, and a concurrent exchange of $165.9 million of the 2030 notes already put about 40.7 million new shares into the float. 6
The November 2 print decides whose read pays
The fiscal Q3 print, due before markets open on Monday, November 2, is the test. 4 If Barber Lake rent starts on schedule and Black Pearl ramps, Jane Street and Citadel sit on the recovery they financed. If it slips, the dilution lands on everyone else.
Either way, the counterparties are now on the record, and that is worth more to a deciding investor than another price target.
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