Compass Point analyst Chase White has downgraded shares of struggling bitcoin (BTC-USD) miner Core Scientific (NASDAQ:CORZ) to Neutral from Buy on the basis of its tight liquidity position. What was a $13 stock a year ago is now just $0.18 at the time of writing. Recall the miner warned investors last week that it may file for bankruptcy protection as it will no longer pay equipment-related debt obligations due in late October and early November, hence CLSK stock dropped 24% just in the past five sessions. "Given that a large portion of its existing debt is equipment financing backed by mining rigs, we believe there's a good chance that CORZ's creditors agree to restructure voluntarily in order to not have to take possession of the rigs in the current market where rig prices have fallen 60%+ from 2021 highs," White wrote in a note to clients. "In order to effectuate a restructuring, it may have to sweeten the deal for creditors through either some form of equity upside (i.e. shares/warrants) or some other arrangement that we believe would likely result in a significant dilution of current shareholder economics," he added. That shareholder dilution is still unclear, White noted, as there's a chance that the miner files for bankruptcy where the equity value would likely be completely wiped out.The analyst's Neutral rating converges with the Quant rating of Hold, but disagrees with the average Wall Street rating of Buy. Earlier t...
