Core Scientific, a Bitcoin (BTC) mining company, may be the next to file for bankruptcy after reporting a third-quarter loss of more than $400 million. The business, regarded as the biggest publicly traded Bitcoin miner in the US, has now lost a staggering $1.7 billion for the year after a new SEC filing revealed a loss of $434 million for the third quarter.
In its most recent filing, the firm stated that management had actively taken initiatives to cut operational costs, remove and postpone development expenses, reduce and delay capital expenditures, and improve hosting revenues.
Is bankruptcy looming?
The firm also mentioned that several debt payments due in October of this year had not been made, and it predicted that its creditors would sue it as a consequence. In October, Core Scientific acknowledged that the company would go bankrupt and was on the verge of doing so. For assistance in assessing strategic options, the business has already retained the law firm Weil, Gotshal & Manges LLP, and PJT Partners LP as financial consultants.
Core Scientific had $32 million in cash and 62 bitcoins as recently as last month. This decreased considerably from the company’s prior position of 8,000 BTC before the second quarter when most of its bitcoin assets were sold off. In its most recent SEC filing, Core Scientific said it expects to run out of funds “by the end of 2022 or sooner.” It said there is now a “serious question” about the company’s capacity to do business as usual.
A probable bankruptcy for Core Scientific is anticipated to have wide-ranging effects on the bitcoin and cryptocurrency mining sector, given the size of the Nasdaq-listed firm. Following the announcement of the results report on Tuesday, shares of Core Scientific fell 20% for the day. This year, almost 99% of the stock’s value has been lost.
Are mining companies in the fall?
Argo Blockchain, a cryptocurrency mining company, is also attempting to raise additional liquidity through subscriptions for common shares and has warned that failure could result in the company ceasing operations. Core Scientific is one of many cryptocurrency mining companies struggling to remain operational in the current market.
Iris Energy, an Australian mining company, also disclosed in a Nov. 21 statement to the SEC that it had disconnected hardware because the units were providing “insufficient cash flow,” which is another indication of financial hardship.
Charles Edwards, the founder of asset management Capriole Investments, has been particularly pessimistic about the health of Bitcoin mining and highlighted in a tweet on November 22 that this kind of reaction is typical when the price of Bitcoin is lower than the cost of mining.
This article has been originally published at: https://crypto.news/bitcoin-mining-company-core-scientific-reports-a-400-million-quarterly-loss/