Core Scientific plans $350 million convertible notes offer

AUSTIN, Texas - Core Scientific, Inc. (NASDAQ: CORZ), a company specializing in bitcoin mining and high-performance computing infrastructure, has announced its intention to offer $350 million in convertible senior notes due in 2029. The private offering is aimed at qualified institutional buyers and is contingent on market conditions.

The notes, set to mature on September 1, 2029, will be senior, unsecured obligations of Core Scientific. Interest will be payable semi-annually, with noteholders having the right to convert their notes under certain conditions and during specific periods. Core Scientific will have the option to settle conversions with cash, shares of its common stock, or a combination of both.

Starting September 7, 2027, Core Scientific may redeem the notes, in whole or in part, for cash if the company's stock price exceeds 130% of the conversion price over a certain period and other conditions are met. Additionally, in the event of a fundamental corporate change, noteholders may require the company to repurchase their notes at the principal amount plus accrued interest.

The interest rate and initial conversion rate for the notes will be determined when the offering is priced. Core Scientific plans to use the net proceeds to repay outstanding loans under a credit and guaranty agreement from January 23, 2024, redeem all outstanding senior secured notes due in 2028, and for general corporate purposes.

The offering and any potential conversion shares have not been registered under the Securities Act of 1933 or any other securities laws. Therefore, they cannot be sold without an exemption or transaction that is not subject to registration requirements.

This initiative is part of Core Scientific's broader business strategy, where the company operates several data centers across the United States and derives most of its revenue from bitcoin mining for its own account.

The above information is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.

In other recent news, Core Scientific has secured $6.7 billion in high-performance computing contracts, including a 12-year agreement with CoreWeave that is projected to contribute $2.0 billion to the company's cumulative revenue. The company also reported mining 411 bitcoins in July, generating approximately $25.2 million in sales proceeds. Analysts from Cantor Fitzgerald and H.C. Wainwright have given Core Scientific an Overweight and Buy rating respectively, reflecting confidence in the company's strategic moves.

In addition, Core Scientific has solidified its executive team with new employment agreements for its CEO, Adam Sullivan, and its Chief Legal and Administrative Officer, Todd M. DuChene. The company also announced that its tranche 2 warrants have become exercisable, a milestone attributed to the company's robust operating and trading performance.

These developments are part of Core Scientific's recent expansion and strategic initiatives in the digital infrastructure and bitcoin mining industry. The company's total contracted power now stands at 1.2 gigawatts, enabling it to offer nearly 500 MW of infrastructure for high-performance computing hosting.

InvestingPro Insights

As Core Scientific, Inc. (NASDAQ: CORZ) ventures into the financial markets with its $350 million convertible notes offering, recent data from InvestingPro provides insights into the company's financial health and stock performance. With a market capitalization of $2.45 billion, Core Scientific is navigating through a dynamic market environment.

InvestingPro Tips highlight that Core Scientific has experienced a high shareholder yield and analysts are optimistic about the company's profitability in the near term. In fact, there are expectations that net income will grow this year, which could signal a positive outlook for investors considering the notes offering. The company's stock has also been noted for its high price volatility, which may appeal to certain investors seeking to capitalize on market fluctuations.

Key metrics from InvestingPro Data indicate that Core Scientific's revenue has grown by 8.25% over the last twelve months as of Q2 2024, with a quarterly growth rate of 11.18% in Q2 2024. This revenue growth is coupled with a gross profit margin of 30.3%, showcasing the company's ability to maintain profitability in its operations. Moreover, the company has delivered a strong return of 175.29% over the last year, which may be an attractive point for potential investors.

For those interested in a deeper dive, InvestingPro offers additional tips and metrics on Core Scientific, providing a more comprehensive understanding of the company's financial position and market performance. There are currently 10 more InvestingPro Tips available for Core Scientific, which can be accessed through the dedicated link: https://www.investing.com/pro/CORZ.

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