Bitcoin Miner Marathon Digital’s Shares Downgraded After Compute North Files for Bankruptcy Protection – Bitcoin News
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Bitcoin miner Compute North filed for Chapter 11 bankruptcy protection in Texas on Thursday as the crypto winter continues to weigh on crypto mining operations. The bankruptcy filing, filed on September 22, shows that the company is working to stabilize its operations in order to pay back creditors.
Count North files for Chapter 11 bankruptcy protection
Five months ago last April, Compute North revealed that the company is building a 300 megawatt (MW) data center in Texas. Months before that, at the end of 2021, Compute North struck a deal with Marathon Digital Holdings (Nasdaq: MARA ), and the two companies planned to host more than 100,000 application-specific integrated circuit (ASIC) mining workers in data centers around the country.
Recent Chapter 11 bankruptcy protection filings now indicate that Compute North is dealing with financial issues. Kristyan Mjolsnes, director of Compute North’s marketing and sustainability team, told Bloomberg’s Steven Church and David Pan that the company is working to stabilize its operations.
Compute North is looking for “an opportunity to stabilize its business and implement a comprehensive restructuring process,” Mjolsnes said. “[It] enables us to continue serving our customers and partners and make the necessary investments to achieve our strategic goals,” explained the company’s director.
The bankruptcy filing stems from the company raising approximately $410 million in equity and debt financing this year. In addition, Compute North has had to deal with falling bitcoin (BTC) prices, and at the end of June it was reported that $4 billion in bitcoin mining loans were in trouble. The fall in the price of bitcoins and cryptocurrencies has triggered several bankruptcies involving digital currency lenders and cryptocurrency-backed hedge funds.
MARA stock downgraded due to Compute North’s recent bankruptcy filing, Marathon says Compute North restructuring ‘will not affect current mining operations’
Compute North’s bankruptcy has weighed on Marathon Digital shares after BTIG analyst Gregory Lewis decided to downgrade the stock. Lewis said that Compute North’s recent filing “puts weight on MARA’s ability to grow its hash capacity. In the longer term, however, Compute North’s bankruptcy could provide MARA with an opportunity to build a data center infrastructure footprint at difficult prices. Marathon Digital also discussed the recent bankruptcy filing on Twitter.
“An application was published today related to one of our hosting services,” Marathon Digital tweeted. “Based on the information currently available, we understand that this application will not affect our current mining operations. We are in contact with the hosting provider and will monitor their progress as they work through this process,” the bitcoin miner added.
What do you think about Compute North’s bankruptcy filing and Marathon’s stock downgrade? Let us know what you think about this topic in the comment section below.
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