Core Scientific Reports Revenue Drop in Q4 2023, Shares Fall 4%

Core Scientific (CORZ), a leading crypto mining firm, released its Q4 2023 results which showed a decline in revenue and a decrease in net losses. This caused a 4% drop in their shares during after-hours trading.

In their earnings report on March 12, Core Scientific announced a total revenue of $502.4 million for 2023, a $137.9 million decrease from the previous year’s $640 million. The drop in revenue was attributed to the company’s exit from the mining rig sales business and an increase in the global Bitcoin hash rate in 2023.

The company’s net revenue for Q4 2023 was $141.9 million, a $20.7 million increase from Q4 2022.

Furthermore, Core Scientific reported a significant improvement in net losses for 2023, with only $246.5 million compared to the previous year’s $2.14 billion. In Q4 2023, net losses were at $195.7 million, a decrease from $434.9 million in Q4 2022.

After emerging from a bankruptcy crisis and a 13-month restructuring process to resolve $400 million in debt, Core Scientific was relisted on the NASDAQ on Jan. 23. This debt was caused by declining Bitcoin prices, rising energy costs, and debt tied to the bankrupt crypto lender Celsius.

The company also reported that they mined a total of 13,762 BTC in 2023, making them the largest publicly traded mining firm in the United States.

Despite these positive results, Core Scientific’s stock saw a 4.6% drop on March 12, ending the day at $3.54 per share. This decline continued in after-hours trading, with a further 4% drop to around $3.40 according to Google Finance.

A spokesperson for Core Scientific stated that they were not overly concerned about the market’s response to their Q4 earnings, citing the overall dampened price action for publicly traded Bitcoin miners in recent weeks. Marathon Digital (MARA) saw a 21% drop in stock over the last month, while rival miner Riot Blockchain (RIOT) fell 25% within the same time period.

The Fear of Halving Among Bitcoin Miner Investors

According to Mitchell Askew, the head analyst at Blockware Solutions, the recent drop in miner share prices can be attributed to investors’ hesitation in investing before the upcoming Bitcoin halving event. This event, which will cut the rewards paid to miners in half, has caused concern among investors.

In a report released on January 26 by Cantor Fitzgerald, it was predicted that several Bitcoin mining companies may struggle to remain profitable after the halving. However, with Bitcoin currently trading at $72,000, it is expected that none of the listed firms will be in the red after the halving, as long as there is no significant change in hash rate and the price of Bitcoin stays above $62,000.

A spokesperson for Core Scientific stated that they are well-prepared for the halving, with plans to update their mining rigs and increase their hash rate utilization. This sentiment is reflected in the recent bullish outlook on Core Scientific by analysts, with investment firms such as HC Wainright and Compass Point upgrading their ratings and setting high price targets.

As the market appetite for crypto mining companies increases, it is clear that web 3.0 and blockchain technology will play a crucial role in the future of business. With the rise of concepts like digital identity and the metaverse, it is evident that Google and other companies are also exploring the potential of web 3.0.