SAN DIEGO, Nov. 23, 2022 (GLOBE NEWSWIRE) —
The Class: Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Core Scientific, Inc. (NASDAQ: CORZ, CORZW) securities between January 3, 2022 and October 26, 2022, for violations of the Securities Exchange Act of 1934. Core Scientific is a blockchain computing data center provider and digital asset mining company.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Core Scientific, Inc. Shareholders who want to be appointed lead plaintiff for the class must file their papers by January 13, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: Core Scientific, Inc. (CORZ) Misled Shareholder Regarding its Business Operations and Financial Prospects
According to the complaint, Core Scientific became a public company via business combination with Power & Digital Infrastructure Acquisition Corp. (“XPDI”) consummated on January 19, 2022.
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’s stock fell $0.72, or 9.4%, to close at $6.98 on March 3, 2022.
Then, 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’s stock price fell $0.15, or 10.3%, to close at $1.30 on September 29, 2022.
On October 27, 2022, 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’s stock fell $0.789, or 78.1%, to close at $0.221 per share on October 27, 2022.
Accordingly, defendants failed to disclose to investors: (1) that, due in part to the expiration of a favorable pricing agreement, the Company was experiencing increasing power costs; (2) that the Company’s largest customer, Gryphon, lacked the financial resources to purchase the necessary miner rigs for Core Scientific to host; (3) that the Company was not providing hosting services to Celsius as required by their contract; (4) that the Company had implemented an improper surcharge to pass through power costs to Celsius; (5) that, as a result of the foregoing alleged breaches of contract, the Company was reasonably likely to incur liability to defend itself against Celsius; (6) that, as a result of the foregoing, the Company’s profitability would be adversely impacted; and (7) that, therefore, there was likely substantial doubt as to the Company’s ability to continue as a going concern.
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About Robbins LLP: A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. To be notified if a class action against Core Scientific, Inc. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
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