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Bitcoin mining firm Core Scientific has seen its stock price double in the past 48 hours, from a low of $0.15 to a high of $0.46, following $72 million in financing from B. Riley.
The news comes after Core Scientific, one of the largest crypto-mining firms in the U.S., experienced a less-than-stellar year.
The NASDAQ-listed company was hard hit by rising energy costs and falling Bitcoin prices, with the company’s stock plummeting roughly 95% since January 2022.
These business concerns culminated in Core Scientific announcing earlier this year that it would be suspending principal and interest payments due in October and early November to several of its equipment lenders and debtors. The announcement also highlighted the possibility of the firm’s bankruptcy.
A spokesperson for B. Riley said in the statement that “bankruptcy is not necessary at all” for the company and “the vast majority of Core Scientific's issues are self-imposed and can be corrected with an open, transparent discussion and ongoing participation” with its lenders and investors.
B. Riley is a diversified financial services business specializing in investing in small and medium-sized firms.
The investor, explaining the cause of the miner's woes in the recent statement, pointed to “an aggressive, ill-conceived strategy by the Company to continue to build out power facilities and expand miners while never selling Bitcoin on hand and never hedging prices.”
The investor said in the statement that this approach eventually forced Core Scientific to sell its entire stock of 9,618 Bitcoin at “a massive loss.”
Core Scientific also suffered from its exposure to bankrupt crypto lender Celsius, court documents were revealed in early October.
As per the court filing, Celsius owed the Bitcoin miner millions of dollars in unpaid electricity tariffs, to the tune of around $53,000 per day.
Bitcoin miners suffer across the board
Though Core Scientific’s performance this year has been challenging, its fate hasn’t been particularly dire by the standards of the Bitcoin mining industry.
Marathon Digital Holdings, currently the largest Bitcoin miner by market cap, has seen a similar fall in the price of its shares, with MARA dropping from a peak of $39.40 in December 2021 to roughly $4.34 as of writing.
Riot Blockchain, another leader in the niche, saw its shares fall from $25.84 to $4.02 in the same period.