Against Core Scientific filed a collective lawsuit

Against Core Scientific filed a collective lawsuit

Core Scientific shareholder filed a collective lawsuit against a mining company for concealing unfavorable financial factors that led to investors losses.

The plaintiff May pan claims that in the period from March 3 to October 28, 2022, the company also made false or misleading statements “.

According to the document, on March 3, Culper Research published a report in which she claimed that Core Scientific overestimated her profitability and entered the lawsuit with the largest client of the hosting – Gryphon Digital Mining. It turned out that the latter did not have enough financial resources for the purchase of devices specified for placement.

Core Scientific shares on this day fell by 9.4% – to the closing price of $ 6.98.

On September 28, another client of the company, Celsius, filed a petition to the court. The bankruptcy proceedings of the bankruptcy procedure announced a violation of Core Scientific conditions of the hosting agreement, disrupting the timing of the installation of equipment and levying unjustified allowances for payment.

Against the background of the news news, papers fell by 10.3% – up to $ 1.30.

On October 27, the mining company said that before the end of the year it may finally exhaust reserves in cash and equivalents. Core did not exclude the submission of bankruptcy applications to protect against creditors.

On this trading day, shares collapsed immediately by 78.1%, to $ 0, with an “abnormally high” volume of trading.

The plaintiff also indicated that the company hid the end of the agreement on the preferential price of electricity from shareholders. As a result, tariffs increased more than doubled, increasing the costs of independent mining.

May Pan requested a lawsuit from Core Scientific payment of losses incurred, including interest proved in court, and reimbursement of “reasonable costs” on the process.

All investors of the company who are in a “similar situation” may join the claim, the statement said.

The defendants in the case, along with the company, were named President and CEO Michael Levitt, former financial director Michael Tshupek (until April 4), as well as the current CFO – Denise Sterling.

At the time of writing the Core Scientific Promotion, $ 0.21 is traded at NASDAQ. From the opening of the session, the quotes lost more than 8%.

Recall that according to the results of October, the total income of bitcoin mainers grew by only 7% and amounted to $ 589.7 million. In the previous month, the indicator collapsed immediately by 19%.

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