Bitcoin Miner Firm Core Scientific Posts $400 Million Quarterly Loss – Bankruptcy Soon?
Bitcoin (BTC) mining firm Core Scientific could be next in line for a bankruptcy filing after posting a loss of well over $400m in the third quarter.
The company, which is known as the largest publicly listed Bitcoin miner in the US, has now lost a whopping $1.7bn for the year after a new SEC filing revealed a third-quarter loss of $434m.
“Management has been actively taking steps to decrease operating costs, eliminate and delay construction expenses, reduce and delay capital expenditures and increase hosting revenues,” the company commented in the latest filing.
It added that certain debt payments that were due in October this year have not been made and said it expects creditors to take legal actions against it as a result.
Core Scientific in October admitted that it was about to run out of money and said at the time that bankruptcy is a possibility. The company has already engaged the law firm Weil, Gotshal & Manges LLP as legal advisers and PJT Partners LP as financial advisers to assist in evaluating strategic alternatives.
As recently as last month, Core Scientific held $32m in cash and 62 BTC. That was down significantly from a holding of 8,000 BTC before the second quarter when the company sold off the bulk of its bitcoin holdings.
According to the latest SEC filing, Core Scientific anticipates that existing cash resources will be depleted “by the end of 2022 or sooner.” It added that “substantial doubt” now exists regarding the company’s ability to continue operations going forward.
Given the large scale of the Nasdaq-listed company, a potential bankruptcy for Core Scientific is expected to have wide-ranging implications for the bitcoin and crypto mining industry.
Shares of Core Scientific fell by 20% for the day on Tuesday after the earnings report was released. The stock is now down by close to 99% for the year.