Bitcoin Miner Core Scientific’s Stock Price Rose By 240%

Dec. 16, 2022
Bitcoin Miner Core Scientific’s Stock Price Rose By 240%

Following the news from one of its major creditors, B. Riley Financial, that new money would be presented to help the firm escape bankruptcy on December 14, the shares of Bitcoin (BTC) mining company Core Scientific have grows by almost 243%.

CORZ was trading at $0.46 earlier today, according to Tradingview data. In one year, the stock market lost 95% of its value, albeit there are presently some signs of a minor recovery.

B. Riley Financial, a supplier of diversified financial services, has sent an open letter to its lenders and stockholders.

The financial business worked with the bitcoin mining company to restructure its debt and create liquidity.

To do this, B. Riley has offered to lend the mining company $72 million on very favorable terms for a substantial period.

According to the finance agreement’s requirements, there are no contingencies, and it is preparing to invest the first $40 million.

Furthermore, the banking institution stipulated that before obtaining the last $32 million, the Bitcoin mining company would have to halt all payments to equipment lenders so long as the bitcoin price is lower than $18,500.

Financial Crisis for Bitcoin Miners Following FTX Collapse

Bitcoin miner Core Scientific announced on November 22 that the company lacks the money to operate through 2023 in a quarterly report.

Also, it expressed worry about its ability to generate funds through the capital market or the financial sector.

Additionally, for all relevant choices, they explore strategic alternatives and choices, including bankruptcy.

Today’s Financial Times stated that:

Hedge funds have increased their short bets on cryptocurrency mining company stock, predicting that more would face financial collapse following the collapse of the FTX exchange. 

Given that the price of bitcoin has dropped significantly this year, hedge funds, a group of private investors, think that certain companies would be unable to maintain their operations.

Related Reading | Cardano Algorithmic Stablecoin Is Scheduled To Launch In January 2023

As a result, the cost of running technology depends on electricity has gone up.

The collapse of Sam Bankman Fried’s FTX, in the opinion of negative investors, would make things worse for a sector of the cryptocurrency market that expanded swiftly last year, usually using borrowed money to benefit from the high prices of tokens like Bitcoin.

Ammar Raza

Associate editor
Skilled in crafting compelling content, with a deep enthusiasm for blockchain technology. I offer precise and easily comprehensible perspectives on cryptocurrencies, decentralized finance, and the ever-evolving landscape. Count on me as a reliable resource to remain informed about the latest advancements in the world of crypto.