Core Scientific Falls After Filing for Bankruptcy
21 December 2022 - 10:51PM
Dow Jones News
By Will Feuer
Shares of Core Scientific Inc., which went public last year
through a merger with a special-purpose acquisition company,
declined after the cryptocurrency mining company filed for chapter
11 bankruptcy protection.
The stock, already down 98% this year, fell another 15% to 18
cents a share in premarket trading on Wednesday.
The company said earlier Wednesday that it would continue to
operate its self-mining cryptocurrency and hosting operations. Core
Scientific said these operations are cash-flow positive on a
debt-free basis.
The prolonged decline of the value of bitcoin as well as surging
electricity costs pushed the company into bankruptcy, Core
Scientific said. Certain hosting customers also failed to honor
their payment obligations.
Last week, shares of Core Scientific popped after one of its
largest creditors, B. Riley Financial Inc., offered the company
fresh financing to stave off bankruptcy. B. Riley last week wrote
an open letter to the firm suggesting that it was willing to give
Core Scientific $40 million immediately, and an additional $32
million following stipulations that included the price of bitcoin
rising above $18,500.
Bitcoin recently traded at about $16,868 a coin, about 65% lower
since the start of the year.
Core Scientific had agreed in July 2021 to merge with Power
& Digital Infrastructure Acquisition Corp., a SPAC, in a deal
the companies valued at about $4.3 billion.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
December 21, 2022 06:36 ET (11:36 GMT)
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