According to , a new securities filing, Core Scientific ( CORZ), will not make October and November debt payments. The shares of the bitcoin mining company fell as high as 76% Thursday morning.
Core stated that it is exploring other capital structures and is currently working with legal and financial advisers. However, Core warned that it may have to file bankruptcy. Common stockholders would lose all their investments in this case.
Core stated that “Given the uncertainty about the Company’s financial condition, substantial doubt exists as to the Company’s ability to continue,” in a filing with the Securities and Exchange Commission
Core, a bitcoin mining company, often takes on debt in order to stay competitive in a business that has heavy capital expenditures, such as mining equipment, facilities and electricity costs. Due to falling cryptocurrency prices and rising electricity costs, these companies are cash-strapped.
“I have heard a lot about bitcoin miners who are more vulnerable to rising energy prices and have a lot debt,” says Chris Brendler, a senior equities analyst with D.A. Chris Brendler, senior equity analyst at D.A., says Core Scientific is one of these. Davidson. Core was downgraded by Brendler last week from ‘buy to ‘neutral.
After the company filed a securities filing on Thursday, it accused Celsius Network, a bankrupt crypto lender, of not paying Core its bills. According to Core ‘s Oct. 19 bankruptcy court motion, the mining company claimed it would pay an additional $1.65million to host Celsius’s mining operation,. According to the motion, the contract charges Celsius a flat fee that doesn’t take into account spikes in crypto mining costs.
In a reply to Core Scientific’s initial complaint in the Celsius bankruptcy matter, Celsius’ legal counsel stated that Core Scientific was running 10,885 bitcoin mining computers for the embattled company.
The loss of these machines would result in millions in revenue Celsius was using to pay its bankruptcy proceedings. A cash flow report by Celsius’ legal counsel shows.
Core wants the court to order Celsius to pay its bills or end their contract. In November, the court that oversees the Celsius bankruptcy hearing will hear the matter.
Core stock has dropped more than 97% since its peak in January 2008.