Core Scientific, a Bitcoin mining company based in Texas, recently announced the pricing of its increased offering of $400 million in 3.00% convertible senior notes due in 2029. Originally set at $350 million, the offering was upsized due to favorable market conditions. The notes are scheduled to settle on August 19, 2024, and will be issued privately to qualified institutional buyers.
The company plans to use the proceeds from the offering for various purposes, including repaying outstanding loans and senior secured notes. Core Scientific is expected to gain around $386.6 million from the offering, with the potential to reach $445.0 million if additional notes are purchased. After repaying debts, the remaining funds will be allocated towards general corporate needs such as working capital, expenses, and potential acquisitions.
Core Scientific faced financial challenges in the past, filing for bankruptcy protection in December 2022 following a cryptocurrency market downturn and the failure of a partner company. However, the firm successfully emerged from bankruptcy after a Chapter 11 restructuring plan was approved in January. By shedding $400 million in debt, Core Scientific was able to continue its operations and return to the stock market.
One of the key strategies that contributed to Core Scientific’s recovery was its pivot to artificial intelligence (AI). The company secured a significant agreement with CoreWeave, a startup supported by Nvidia and a leading chipmaker’s AI model technology supplier. This partnership involves Core Scientific supplying an additional 112 megawatts of computing power to boost CoreWeave’s operations.
Since returning to the stock market, Core Scientific has experienced significant growth, with its stock price increasing by 145% to $8.46 per share on the Nasdaq. The company’s CEO, Adam Sullivan, highlighted the remarkable progress made since January and emphasized the focus on developing top-tier digital infrastructure.
Core Scientific’s recent financing through convertible senior notes reflects a positive outlook for the company’s future growth and expansion. By strategically utilizing the funds raised and leveraging partnerships in the AI space, Core Scientific is well-positioned to continue its upward trajectory in the cryptocurrency and technology sectors.
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