Core Scientific shares plummeted amid the news
Information about the freezing of payments led to a drop in the company’s securities. The losses amounted to 70%.
The company submitted documents to the SEC stating suspending debt payments this and next months. According to miner’s comments:
The uncertain financial situation calls into question the ability to continue operations in the future.
The bankruptcy of the company would bring the stock down to zero. However, compared to the highs of 2021, the stocks lost nearly 97%.
According to analysts, several negative factors have led to Core Scientific’s distress:
- rising energy costs
- significant debt load
- a long-term bearish trend in the market
- growth of BTC hashrate.
As a rule, these circumstances do not affect them that much on their own, but when everything happens at once, the consequences could be heavy.
Core Scientific’s difficulties don’t end there. As early as November, a court order regarding the contract with Celsius Network will appear. After filing for bankruptcy, Celsius is under legal protection. As a reminder, Core Scientific claims that the company paid $1.65 million in hosting fees for Celsius miners, but no payments have been received from them. It led to a demand to force payment.
If the contract is not terminated by court order, the financial condition of Core Scientific will be adversely affected. The miner has 24 BTC in its reserves. At least 1,000 BTC have been sold since the beginning of the month.
Nevertheless, some experts believe that the situation with Core Scientific will not affect the growth of interest in the shares of mining companies existing on the market now.
