Core Scientific offered $72 million to exit the crisis. The company's stock is up 198%
Shares of the mining company, which had barely been worth more than $0.13 at the beginning of the week, began to rise vigorously, nearly reaching $0.4 at the close of December, 15. It followed an offer of a $72 million funding plan from financial services platform B.Riley.
According to Marketbeat, 6,572 stock options were purchased on December, 15. It demonstrates traders' optimistic sentiment about Core Scientific. The likelihood of a funding plan has given the community confidence that the company can survive in a bear market.
Moreover, asset price appreciation could be the starting point for a reversal. Core Scientific is one of many mining companies that have faced a crisis this year and suffered serious financial losses. Even with this large increase, the value of the miner's stock is still 95% lower than it was at the beginning of 2022.
Against the backdrop of existing losses, shareholders and creditors received a proposal from B. Riley, which outlined an exit plan involving $72 million in financing. If this strategy is implemented, Core Scientific will avoid filing for bankruptcy.
If the deal is accepted, $40 million will be received immediately. The rest will be paid if the mining company suspends payments to all creditors until the BTC value is above $18,500.
According to B. Riley, the funding provided will be enough to cover operating expenses for two years. Also, according to analysts, Core Scientific will have the opportunity to generate $ 165 million in annual revenue at a bitcoin price of $ 18 thousand. Each increase in the cost of BTC at $ 1 thousand will bring $20 million more.
Core Scientific said it might default on a number of debt obligations in October. According to its quarterly report, the company voiced the probability that its reserves will be exhausted by the end of the year. It was noted that the company sees no way to attract financing in the current market conditions.