Core Scientific completed the reorganization process after a bankruptcy proceeding that lasted a little under a calendar year. Core Scientific announced on Wednesday that it would be relisting its shares on Nasdaq.
Core Scientific shares (CORZ) immediately fell more than 30 percent after the opening bell on Wednesday. They dropped to about $3.50, down from $5.89 at their initial price.
“Price volatility is not a surprise,” Core Scientific spokesperson told Blockworks. “We remain focused on executing our pragmatic growth plan to deliver long-term shareholder value.”
After bitcoin’s price dropped more than 60% in 2021, Core filed for bankruptcy on December 20, 2022. The company was one of several that borrowed high interest rates to finance growth during the bull market in 2021.
The US Bankruptcy Court of Southern District of Texas, in its approval of the reorganization plans last week called for “100% recovery to all creditors…and significant recovery to existing equity holders,” According to documents filed in court, the plan includes the equitization of about $400 million worth of secured and unsecured claims. According to court documents, the plan involves the equityization of approximately $400 million in secured claims and unsecured ones as well as an annual reduction in debt service of roughly $60 millions.
Core has announced that Core is now a separate entity. “from Chapter 11 with a strengthened balance sheet” After successfully reducing debt by 400 million dollars “through the conversion of equipment lender and convertible note holder debt to equity.”
Bitcoin stocks posted mixed results Wednesday. Marathon Digital and Riot Platforms lost 3.5% and 2,7% respectively at the mid-session. Hut 8 Corp., whose stock is now down by close to half since 2024 began, was able to maintain a small gain of 0.3% on Wednesday.
Blockworks Research analyst say this discrepancy could indicate that miners are dumping the asset. The availability of spot ETFs could have contributed to this change. These provide a direct way for bitcoin investors to gain exposure.
“There’s also the upcoming bitcoin halving (which will reduce miners’ primary source of income by 50%), but that should come as even less of a surprise, seeing as it’s been foreordained since 2008,” Blockworks analysts stated in a note dated Jan. 18.
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