Core Scientific Stock Plummets 30% After Bankruptcy Exit

January 25, 2024

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Core Scientific, a leading Bitcoin mining firm that went bankrupt, witnessed its stock plummet by close to 30% after the company emerged from bankruptcy and relisted its shares on the American stock exchange, Nasdaq.

It is important to note that the company underwent a 13-month restructuring procedure, and as per the data from Robinhood, the price of CORZ shares went down by close to 30%, and at the time of writing, it is trading at $3.84.

Core Scientific Stock Nosedives

Core Scientific noted in a press statement that it has a “strengthened balance sheet” and has officially cleared a debt of a whopping $400 million. The company’s stock was relisted on Nasdaq and fell sharply.

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“The Company emerges from Chapter 11 with a strengthened balance sheet and expects to commence the listing of its common stock, tranche 1 warrants, and tranche 2 warrants on the Nasdaq Global Select Market under the symbols CORZ, CORZW, and CORZZ, respectively, on January 24, 2024,” read the release.

Restructuring Plan

The Bitcoin mining company’s restructuring plan included the conversion of debt owed to equipment lenders and convertible note holders into equity in the company. It is crucial to note that convertible notes are a type of debt with the feature of being converted into stocks, and using this strategy, Core Scientific reduced its financial liabilities.

More importantly, the company is also considering converting its remaining debt into equity and using cash as part of its bankruptcy plan.

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As covered earlier, the Bitcoin miner settled its debt with another Bitcoin company, NYDIG, proposing to transfer approximately 27,403 mining machines.

Core Scientific and Sphere 3D Partnered Up

Core Scientific partnered with Sphere 3D, a computer application company, and the deal was approved by United States Bankruptcy Judge Christopher M. Lopez on January 16, 2024, as part of the Bitcoin mining company’s emergence from bankruptcy.

As a part of the deal, Sphere 3D received around $10 million in the miner’s shares and also access to a pool of additional equity if the value of the equity decreased from the plan value.

“Judge Lopez acknowledged in approving the settlement that the case was complex and would have required extensive deliberations to resolve. Judge Lopez acknowledged the efforts that Sphere 3D and Core had put into the settlement negotiations,” read a release.

Mining Companies Filed for Bankruptcy During Crypto Winter

As earlier reported by TheCoinRise, Compute North filed for bankruptcy during the crypto winter, when the price of Bitcoin was severely affected by the collapse of crypto exchange FTX.

Another leading Bitcoin miner, Marathon Digital, confirmed that it had an exposure of around $80 million to Compute North’s bankruptcy.