Well-known bitcoin mining company Core Scientific has released a statement regarding the company’s financial liquidity that could stress its investors and stakeholders after it filed a petition with the SEC that it may not have funds. Already at the end of this year and want to file for bankruptcy.
Why Core Scientific lacks liquidity
Core Scientific explains the reasons for the company’s lack of liquidity and the inability to pay debts to creditors:
“The company’s liquidity and profits are affected by the continued decline in Bitcoin price and the rising cost of electricity as well as the increasing global Bitcoin hash rate.”
From the aforementioned reason, the company has suspended debt repayment to creditors for several months. to try to reduce expenses and costs required per month
After the news, the company’s shares plunged more than 80% from $1.08 to $0.22, despite being listed on the stock market after merging with Power & Digital Infrastructure Acquisition. Corp
The company was investigated for fraud.
Los Angeles-based law firm Portnoy Law Firm has begun investigating Core Scientific for securities fraud. And it is expected that there may be a lawsuit against the miners as well. along with allowing investors to contact Portnoy Law Firm
A report from Culper Research alleges that Core Scientific has been selling crypto mining services at exorbitant prices and conducting a series of suspicious transactions prior to dumping through SPAC.
What will the future be like?
Although the company is filing for bankruptcy and may be sued, Core Scientific is determined to stay in business and look to restructure the company. The company hired PJT Partners LP, a financial advisory firm, and Weil, Gotshal & Manges LLP, a law firm.
Core Scientific revealed that the company may have additional liabilities on its common stock. Financing or debt and potential asset sales
Source: LINK