What’s Happening with Core Scientific?
Core Scientific, a titan in the Bitcoin mining world, has found itself in hot water, or should I say, a financial black hole. Filing for Chapter 11 bankruptcy on December 21, 2022, they’re not just wading in the shallow end of financial trouble – they’ve belly-flopped into the deep end. And now, they are set to sell off some rather depressing Bitmain coupons worth $6.6 million. But before you get too excited, let me break down the fine print.
The Coupons: Gold or Fool’s Gold?
These precious scraps of paper (or digital ink, I guess) come with strings attached. The coupons can only be used for 30% of any new order of S19 Miners from Bitmain. If you’re thinking, “Great! Free miners!” think again, because you can’t trade these beauties in for cash. Nope, they’re as good as a coupon for free hugs at a shark encounter – exactly zero value when it comes down to it.
Timing is Everything
And just to keep things exciting, these coupons are set to expire between March and April of 2023, right when Core anticipates surfacing from the storm of bankruptcy. Why would they want to pick up more S19 miners anyway, even with shiny coupons in hand? They’ve made it clear that investing in new miners under Chapter 11 is about as appealing as, well, leaving a huge stack of cash on a sinking ship.
The Discount Dance
In their bid to raise cash, Core Scientific has opened talks with Bitmain, plus two potential buyers who are more than ready to snag the coupons at a steep discount. In this game of proverbial poker, they’re looking at selling $1.9 million worth of coupons for a neat $285,000 and another $4.8 million batch for about $713,000. Remember, folks, that’s only 15% of what these coupons are ‘worth’ — or as the company aptly puts it, “zero” in actual value. Talk about a fire sale!
The Crypto Winter and Its Consequences
It’s no secret the crypto world is facing a winter colder than a polar bear’s toenails. And as prices for S19 miners have plunged, the value of these coupons has taken a nosedive too. Core Scientific notes that recent trades on coupon exchanges have gone for just 15% to 25% of face value. Imagine trading a slice of pizza for a single sneeze – that’s how bad it’s gotten!
In conclusion, while Core Scientific attempts to navigate through murky waters, let’s hope they find more than just coupons – perhaps a treasure map to actual profitability.
