According to an Core Scientific's SEC report, “In addition, the Board has decided that the Company will not make payments coming due in late October and early November 2022 with respect to several of its equipment and other financings, including its two bridge promissory notes.”
The world’s largest Bitcoin miner, Core Scientific, might be filing for bankruptcy. The company admitted that it might be out of cash before the year runs out, so bankruptcy is possible.
The founder of Capriole Fund, Charles Edwards, made this known in a tweet.
Core Scientific has taken a significant hit this year due to the plummeting prices of Bitcoin. Its liquidity position has been severely affected by the prolonged decrease in Bitcoin price, increased electricity costs, increase in global Bitcoin network hash rate, and litigation with Celsius.
Therefore, the company is moving to decrease monthly costs, delay construction expenses and capital expenditures, and increase hosting revenues.
According to Core Scientific's SEC report,
“In addition, the Board has decided that the Company will not make payments coming due in late October and early November 2022 with respect to several of its equipment and other financings, including its two bridge promissory notes.”
Also, the company is actively seeking potential strategic alternatives concerning its capital structure. This includes hiring strategic advisors, raising more capital, or restructuring the existing capital structure.
More importantly, Core Scientific has sought the help of Weil, Gotshal & Manges LLP as legal advisers, and PJT Partners LP, as financial advisers. They will help analyze strategic alternatives the company should take and ways to improve its liquidity.
Finally, Core Scientific stated that in the case of bankruptcy proceedings or insolvency, holders of the company’s common stock could suffer a total loss of their investment.
