Core Scientific Falls After Filing for Bankruptcy

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 [e-mail]

(END) Dow Jones Newswires

December 21, 2022 06:36 ET (11:36 GMT)

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