The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Western District of Texas on behalf of those who acquired Core Scientific, Inc. (“Core Scientific”) (NASDAQ: CORZ) securities between January 3, 2022 through October 26, 2022 (the “Class Period”). Investors have until January 13, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Core Scientific is a blockchain computing data center provider and digital asset mining company. It mines digital assets for its own account and provides hosting services for other large-scale miners.
On March 3, 2022, Culper Research published a report about Core Scientific alleging, among other things, that the Company had overstated its profitability and that the Company’s largest customer lacked the financial resources to deliver the rigs pursuant to its contract. On this news, Core Scientific share price declined by $0.72 per share, or approximately 9.35%, from $7.70 per share to close at $6.98 on March 3, 2022.
On September 28, 2022, Celsius Network LLC and related entities filed a motion to enforce the automatic stay and for civil contempt in bankruptcy proceedings alleging that Core Scientific “has knowingly and repeatedly violated the automatic stay provisions” by refusing to perform its contractual obligations, threatening to terminate the companies’ agreement, and adding improper surcharges. On this news, Core Scientific share price declined by $0.15 per share, or approximately 10.34%, from $1.45 per share to close at $1.30 on September 29, 2022.
On October 27, 2022, before the market opened, Core Scientific disclosed that “given the uncertainty regarding the Company’s financial condition, substantial doubt exists about the Company’s ability to continue as a going concern,” and that it is exploring alternatives to its capital structure. Moreover, the Company held 24 bitcoins, compared to 1,051 bitcoins as of September 30, 2022. On this news, Core Scientific share price declined by $0.789 per share, or approximately 78.12%, from $1.01 per share to close at $0.221 per share on October 27, 2022.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) due in part to the expiration of a favorable pricing agreement, the Company was experiencing increasing power costs; (2) the Company’s largest customer, Gryphon, lacked the financial resources to purchase the necessary miner rigs for Core Scientific to host; (3) the Company was not providing hosting services to Celsius as required by their contract; (4) the Company had implemented an improper surcharge to pass through power costs to Celsius; (5) as a result of the foregoing alleged breaches of contract, the Company was reasonably likely to incur liability to defend itself against Celsius; (6) as a result of the foregoing, the Company’s profitability would be adversely impacted; and (7) as a result, there was likely substantial doubt as to the Company’s ability to continue as a going concern.
If you purchased or otherwise acquired Core Scientific securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at email@example.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.
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Kirby McInerney LLP
Thomas W. Elrod, Esq.