Core Scientific will file for bankruptcy but intends to continue its work
Mining company Core Scientific plans to continue operating despite its intentions to file for Chapter 11 bankruptcy.
This information came from sources with knowledge of the company's financial condition. Core was forced to take such a step by the long decline in the value of cryptocurrencies and the strong rise in the price of energy resources. Cryptocurrency mining activities require a large amount of electricity and the ability to maintain high-tech equipment in working condition.
Based on the situation at the end of yesterday's trading, Core Scientific's capitalization dropped to $78 million, down from $4.3 billion last summer. The stock's value collapsed 98% year over year.
Although the company is managing to generate positive cash flow, it cannot continue to service its equipment lease debt. The source, who preferred to remain anonymous, said that Miner intends to continue operating as normal until an agreement can be reached with the shareholders, who hold most of the debt.
Core Scientific had previously reported on the possibility of a total loss of investment for holders of common stock. It also sounded off on debt payments, noting that creditors could go to court.
The company's plight was caused by the drop in the value of bitcoin from $69,000 to $16,800, as well as increased competition among miners amid rising resource costs.