Cipher Digital Inc. (CIFR) is having a rough Wednesday. The stock is down sharply as investors digest a newly priced $810 million debt offering from the company's subsidiary and a broader sell-off in tech and crypto-linked names.

Debt Financing Weighs On Sentiment

Cipher Digital announced that its wholly-owned subsidiary, Stingray Compute LLC, priced a $810 million offering of 6% senior secured notes due 2031. The notes are priced at 99.750% of their principal amount in a private placement expected to close on June 15. Cipher said it will provide a customary completion guarantee, funding the issuer as needed to ensure the Stingray facility is finished on time.

That's a lot of debt, and the market isn't thrilled. The offering dilutes existing creditors' claims and adds leverage to the balance sheet, which tends to spook equity holders.

Tech And Crypto Weakness Add Pressure

Cipher's slide isn't happening in a vacuum. The tech-heavy Nasdaq is down 1.42%, and the S&P 500 has shed 0.96%. On top of that, the crypto market is looking weak—bad news for data center developers tied to digital assets. Bitcoin is trading at $62,126.93, up a muted 1.33% over the last 24 hours but down 5.64% over the past week. Ethereum stands at $1,640.82, showing a steep 10.11% decline over the last seven days.

When crypto prices fall, the economics of mining and hosting infrastructure get squeezed, and Cipher Digital is right in the middle of that.

Cipher Digital Short Interest Report

Recent exchange data shows that short interest in Cipher Digital decreased during the last reporting period, falling from 54.81 million to 52.53 million shares. That leaves 15.67% of the company's publicly available shares short. With a recent average daily volume of 22.50 million shares, short sellers would need 2.33 days to close out their positions.

So shorts are covering a bit, but the stock is still getting hammered. That suggests the selling is coming from long holders worried about the debt load and the macro environment.

CIFR Price Action: Cipher Digital shares were down 7.75% at $21.25 at the time of publication on Wednesday.