Core Scientific returns to Nasdaq following restructuring after 2022 bankruptcy

Texas-based Bitcoin mining company Core Scientific has resumed trading on the Nasdaq today, following the firm’s restructuring process after declaring bankruptcy in 2022.

In a statement issued on Jan. 23, the crypto miner stated that its restructuring plan enabled a $400 million debt reduction through the conversion of debts from equipment lenders and convertible note holders into equity.

Core Scientific also outlined additional strategies to diminish its debt further, which include the conversion of remaining convertible debt, the exercise of warrants by investors, and the utilization of available cash for debt repayment. According to the reorganization plan, shareholders are set to receive around 60% of the new share capital of Core Scientific, with the firm also committing to repay its debt fully.

Adam Sullivan, the chief executive officer of Core Scientific, expressed optimism about the company’s future, highlighting the firm’s readiness to implement a pragmatic growth strategy, preparation for the upcoming bitcoin halving, and the potential to create value by transforming energy into high-value compute for bitcoin mining and other applications.

The firm, which boasts mining facilities across five U.S. states with a total power capacity of 724 megawatts, plans to expand its mining capacity by more than 50% in the next four years. This expansion includes the deployment of new Bitcoin miners.

Core Scientific’s path to recovery was not without challenges. In November 2022, the company warned of potential cash shortages due to a confluence of factors: a fall in Bitcoin prices, rising electricity costs, increased hash rate, legal expenses, and the bankruptcy of Celsius Network, a major client.

Despite these setbacks, Core Scientific filed for Chapter 11 bankruptcy protection in December 2022 with a clear intention to avoid liquidation and continue operations while negotiating with its major creditors.

In a related development, B. Riley Financial Inc., a Los Angeles-based investment bank and one of Core Scientific’s major creditors, is reportedly under investigation by the U.S. Securities and Exchange Commission for transactions linked to securities fraud.

In December 2022, B. Riley proposed a $72 million non-cash pay financing to Core Scientific, aimed at providing the latter with a two-year runway to achieve profitability.

The broader Bitcoin mining industry has experienced volatility this month. Stocks of major miners such as Marathon Digital and Riot Platforms have seen significant declines.

The latest downturn followed the approval of multiple spot bitcoin exchange-traded funds by the U.S. on Jan. 10, with Marathon Digital’s stock dropping 29.74% since the start of the month and Riot Platforms falling by 32.6% in the same period.