Bitcoin miner Core Scientific met with good omen with receiving an offer of 72 million USD. The mining firm was embattled with a liquidity crisis and facing operational issues. One of the largest lenders for the company, B Riley, came up with the funding and pulled it back from the verge of potential bankruptcy.
TheCoinRepublic reported that following the funding from its top lender, stock price of NASDAQ listed Core Scientific surged up to 300%. CORZ stock price currently trading at 0.43 USD after about 72% surge in a day.
The miner already has an outstanding loan of about 42 million USD from B Riley. In a letter, the lender noted that it was ready to facilitate 40 million USD funding with no contingencies. While the remaining 32 million USD out of said 72 million USD funding would be conditional. For the funding, the Bitcoin miner would need to suspend all the payments to its equipment lenders until BTC trade below its resistance of 18,500 USD.
Bitcoin was at its resistance around 9th November. Currently it is trading at 17,031 USD.
The situation Core Scientific is in was harshly described by B. Riley, who claimed the company had adopted “an aggressive, poorly thought-out strategy to continue to build out power facilities and expand miners while never selling Bitcoin on hand and never hedging prices.”
It mentioned how Core Scientific was compelled to sell 9,618 BTC in April at a loss to the miner of $362 million owing to this strategy.
In a quarterly report submitted on November 22, Core Scientific acknowledged that the business did not have enough cash on hand to last through 2023. Additionally, it stated that it was unsure of its capacity to raise money through stock markets or finance.
The company cited the low price of Bitcoin, rising electricity prices, and Celsius’s failure to repay a $2.1 million loan as the causes of its financial difficulties in a filing on October 26.
We believe it would be a gross violation of the fiduciary duties owed by the Board and Management for those fiduciaries—who must put our interests ahead of their own—to authorize a Chapter 11 filing. B. Riley expressed confidence that Core Scientific would accept the financing offer and reminded the miner of its duty to shareholders. The share price of Core Scientific has decreased by 97.7% from the start of 2022, from $11.02 to $0.25.
Source: https://www.thecoinrepublic.com/2022/12/16/core-scientific-receives-72-mn-usd-funding-corz-stock-surged-300/