A major listed cryptocurrency mining operator has said cash on hand may not last long, making investors wary of its solvency. The company warned, among other things, that it could file for bankruptcy.
News promotion: Core Scientific shares plunged about 75% Thursday morning to a low of about 25 cents, the biggest loss of the year for any major publicly traded US bitcoin miner.
what’s happening: Core Scientific says a combination of falling Bitcoin prices, rising electricity bills, and an ongoing lawsuit with Celsius Network has made it unable to pay its debts.
- “The Board has decided that the Company will not make payments on certain facilities due in late October/early November 2022 and on other financings including two bridge promissory notes.” It shows the documents to be submitted.
- The company is also looking to reduce monthly costs, delay construction costs, increase spending, and increase hosting revenue.
Contact by Axios email Core Scientific did not respond.
big picture: Core Scientific bitcoin sale It doesn’t look like it stopped the bleeding. The company sold almost all of its bitcoin holdings in July, sparking controversy when CEO Mike Levitt pointed out the market had crashed.
- “Our company has weathered past recessions successfully, so we are confident in our ability to weather the current market turmoil.”
- The company continued to sell August When September, per monthly statement. Levitt looked as optimistic recently as the early October update.
- “I am proud of the team’s resilience, adaptability and dedication in the face of challenging industry conditions,” he said.
environment: This is a tough time for miners as more mining machines come online than ever before, even as the price of Bitcoin falls. Bitcoin difficulty show), reducing the profitability of existing businesses.
Flashback: Nasdaq-listed Core Scientific January 20th After completing a SPAC merger with Power & Digital Infrastructure Acquisition Corp.
- It was also one of the rare deals to have few investors About 35% of the shares were redeemed while others were watching and asked for their refund. Refund rate 80 and more.
note: Core Scientific is locked Fight With cryptocurrency lender Celsius Network, now bankrupt over unpaid bills and services.
- This relationship predates Core Scientific’s listing.
- dig sTop 8-K filings Related to Core Scientific’s SPAC merger document, we know that the Bitcoin miner entered into an equipment rental agreement with Celsius Network Lending in November 2020.
what’s next: There is a possibility of bankruptcy.
- “We may seek alternatives to equity or debt financing, delay capital expenditures, evaluate potential asset sales, and seek relief under applicable bankruptcy or bankruptcy laws. I have”.
Brady Dale contributed reporting for this article.