Core Scientific Inc. (NASDAQ: CORZ) faced a complete price wipe-out after its announcement of plans to file for bankruptcy. Earlier today, however, CORZ stock took off by an incredible 75%, despite the news, causing many in the market to turn heads.
CORZ Stock Takes Off Unexpectedly
Core Scientific stock saw a drastic 74% price appreciation earlier today, which surprisingly comes after its announcement of a bankruptcy filing. Important to note that CORZ has still lost 99% of its share price from a week ago when it made public its intentions of taking the Chapter 11 route. However, it is evident that many in the market are of the perception that this restructuring may be better for Core Scientific’s future prospects, and the complete value wipeout came as being unwarranted. This slight bullish resistance may also indicate sentiment relating to the future of cryptocurrency mining, and its overall profitability in the longer term future.
Core Scientific’s Post-Bankruptcy Prospects
The core reason why Core Scientific had been compelled to file for bankruptcy under Chapter 11, had been a result of its total debt amounting to almost $880 million. As a glimmer of hope, what the bankruptcy filing would achieve is a complete writing off of this large debt figure, and free it of its annual interest payments worth tens of millions of dollars. It comes as no surprise why certain market participants are of the view that the move was necessary for Core Scientific, and the first step towards attaining sustainability. The management did state that it plans to continue mining operations into the future, even following the bankruptcy.
A bankruptcy filing is arguably the worst news a shareholder can get hold of, regarding a particular company. CORZ stock, however, is seeing an unexpected climb after its announcement, signaling pockets of optimism among bulls.