, 2022-12-20 22:30:00,
Core Scientific’s 104 megawatt Bitcoin mining data center in Marble, North Carolina
Core Scientific, one of the largest publicly traded crypto mining companies in the U.S., is filing for Chapter 11 bankruptcy protection in Texas early Wednesday morning, according to a person familiar with the company’s finances. The move follows a year of plunging cryptocurrency prices and rising energy prices.
Core Scientific mines for proof-of-work cryptocurrencies like bitcoin. The process involves powering data centers across the country, packed with highly specialized computers that crunch math equations in order to validate transactions and simultaneously create new tokens. The process requires expensive equipment, some technical know-how, and a lot of electricity.
Core’s market capitalization had fallen to $78 million as of end of trading Tuesday, down from a $4.3 billion valuation in July 2021 when the company went public through a special purpose acquisition vehicle, or SPAC. The stock has fallen more than 98% in the last year.
The company is still generating positive cashflow, but that cash is not sufficient to repay the financing debt owed on equipment it was leasing, according to a person familiar with the company’s situation. The company will not liquidate, but will continue to operate normally while reaching a deal with senior security noteholders, which hold the bulk of the company’s debt, according to this person, who declined to be named discussing confidential…
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