- 1 Core Scientific to add $46 million in additional funds by September 25, due to favorable market conditions.
- 2 Low power prices, Bitcoin price increase, and hash rate increase improve the company’s liquidity.
- 3 Core Scientific’s earnings per share for the first quarter beat analyst estimates.
Core Scientific, the Bitcoin mining company that went bankrupt in November, last year, is expecting to finalize its restructuring plan by September. The company also expects to exit proceedings with an extra $46 million due to current favorable crypto market conditions.
Core Scientific’s Reorganization Plan
In their recent filing on May 22, in the Texas Bankruptcy court, the lawyers of the bankrupt firm have updated about the conditions. They said that the company’s liquidity position has improved considerably as a result of bankruptcy, and that the company is planning for a reorganization in the coming future.
The reorganization plan is being discussed with key stakeholders as of now. According to the May 22 filing, the company is planning on how Core Scientific might look after emerging from bankruptcy.
A Chapter 11 bankruptcy basically means that after it is filed, the firm continues to operate with stakeholders’ approval. Although after filing, the firm has to restructure its business, size down business operations, and reduce debt and liquidate assets to repay creditors.
The firm further added that due to the current market conditions, the firm is able to benefit from it. Decreased power costs, increasing Bitcoin prices, and increase in the blockchain’s hash rate are contributing to the company’s liquidity.
During the time that Core Scientific filed for bankruptcy, in December 2021, the price of Bitcoin was $16,900. The current price of Bitcoin is around $27,000 which is a 60% increase.
In addition to the rising Bitcoin prices, the power rates have also decreased by 24% and hash rates have jumped by 24%.
Due to all these favorable market conditions, the company estimates having an additional $46 million in funds, once the reorganizing plan is finalized.
The bankrupt company has also been involved in a lengthy court battle with Celcius network where Core Scientific has accused Celsius of not paying power bills. The crypto miner company expects $11 million from Celsius from the power bills that they haven’t paid.
Core Scientific’s Results
Recently, Core Scientific’s first quarter results were out and they weren’t quite disappointing. The company reported first-quarter earnings per share of $-0.03, $0.16 beating analysts’ estimate of -$0.19. The company clocked a revenue of $129.7M versus analysts’ estimate of $153.01M.
The stock price of Core Scientific saw a small rebound of 2.94% in the last 3 months while being -90.59% down, since its collapse last year.
In the last 90 days, the company has seen positive and negative earnings per share revisions.
According to one of the famous financial media houses, the company’s Financial Health score is ‘performance”.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.