Core Scientific stock fell 30% after filing for bankruptcy
Crypto mining company Core Scientific is facing turbulent trading after listing its shares following its emergence from bankruptcy. According to Robinhood data, Core's stock, CORZ, is down more than 30% at the time of writing, at $3.84.
After undergoing a 13-month restructuring process, the company relisted its shares on the Nasdaq on January 24. In an announcement, Core said it now has a “strengthened balance sheet” after clearing $400 million in debt.
Core's restructuring plan resulted in debt to instrument lenders and convertible noteholders being converted into equity in the company. Convertible notes are a form of debt that can be converted into equity, and by converting this debt into equity, Core Scientific reduces its financial liabilities.
“Price volatility is not surprising,” a Core Scientific spokesperson told Cointelegraph. “We remain focused on executing on our viable growth plan to deliver long-term shareholder value.”
The company is considering converting the remaining debt into equity and using cash as its bankruptcy plan.
Core Scientific is one of the many crypto miners that have been heavily impacted by the crypto winter. In December 2022, the company filed for Chapter 11 bankruptcy due to falling Bitcoin (BTC) prices, rising energy prices, and debts related to the bankrupt Celsius Network. Chapter 11 bankruptcy allows a company to continue operating until stakeholders agree on a restructuring plan.
In the year By 2023, the company had produced 13,762 BTC from its own miners and another 5,512 BTC on behalf of its hosting clients. However, mining companies will face new challenges in 2024.
Asset manager CoinShares predicts an increase in both production and funding costs for Bitcoin miners following the halving event. The expected cost of Bitcoin is estimated to increase from $16,800 and $25,000 to $27,900 and $37,800. Additionally, the post-halving average production value of crypto-miners is expected to reach $37,856.
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