What is a 1.8 million dollar private calculation between SPAC friends?

Two of the wildest bubbles in recent years have been spacs and crypto. If you want to marvel at what happens when both collide, take a look at the following table.

The Bitcoin-Miner Core Scientific went to the stock exchange last year with a USD 4.3 billion. The company is now basically a pink sheet share with a market capitalization of $ 55 million or less than a Beeple.

The remarkable performance has done to make the Chamath Palihapitiya Spac empire look good. Not exactly the career qualification that CEO Mike Levitt - a former CEO of Kayne Anderson and deputy chairman and partner at Apollo would have liked.

But if you have assumed that the crypto winter could have affected the lifestyle of the Bitcoin baron, think about it again! In the first nine months of 2022, Core Scientific spent $ 1.8 million for private jets for Levitt and his colleagues - three times as much as 2021 before it went to the stock exchange.

The company did not respond to inquiries about comments sent to its media email address. We will update as soon as we receive an answer.

The biggest problems with which Bitcoin miner such as Core Scientific and Riot Blockchain are faced with are obvious: the input costs (energy) have risen on a sudden and the output prices (Bitcoin) have vomited. But Core Scientific looks like an exceptionally weak member of a sickly herd, which makes his love for private jets appear a bit strange.

last month warned that it could go bankrupt by the end of the year and would have to miss some debt payments. At the beginning of this week, the (unchecked!) Results of the third quarter were released, which did not make this less likely.

The headlines are that the Bitcoin miner lost another $ 434 million in the third quarter and increased its net loss in 2022 to over $ 1.7 billion. In the meantime, Core Scientific's debt has risen to about 1 billion USD, and the barres reserves fell to less than $ 30 million (although it appears that the liquidation of the largest part of the remaining Bitcoin stock lived the cash to 32.2 million $ 32.2 million).

A look at the small print of the profit publication on Tuesday makes things worse. Core Scientific said that "it does not believe that it was in arrears as part of one of his debt agreements on September 30, 2022", announced that two customers have now initiated legal proceedings this month (his private jet provider still seems to be paid). although).

In November 2022, Sphere 3D Corp. an arbitration request from Jams, in which the existence and violation of a contract for hosting services was claimed. In the arbitration warrior it is claimed that the company did not provide the contractually agreed services and has not repaid around $ 35 million of SPHERE 3D advance payments for such services. The company denies the claims contained in the arbitration claim of Sphere 3D and intends to vigorously defend its interests.

In November 2022, McCarthy Building Companies, Inc. submitted a lawsuit against the company at the US district court for the eastern district of Texas due to alleged breach of contract due to non-payments when not paying certain payments, which were allegedly due to the parties.

In addition to Bitcoin mining, device sales and hosting contracts were an important part of the income of Core Scientific. But “connected parties” have become increasingly important for Core Scientific and made up almost half of the device sales and hosting sales in the third quarter and almost a quarter of all sales in the three months.

This is probably helpful, because one of his largest customers was Celsius, who has already broke, which makes Core Scientific exposed a little over a small number of customers.

honestly, if Core Scientific did it until Christmas, we would be amazed. However, we doubt that the SPAC insiders will then fly commercially. Refinitive data show that Levitt sold 12.6 million of its shares in the third quarter.