Bitcoin mining company Compute North on Thursday filed for bankruptcy protection for 11 summer leases in Texas. The bankruptcy filing, filed Sept. 22, shows the company wants to stabilize operations to pay creditors.
Calculate North’s filings for Chapter 11 bankruptcy protection
Five months ago last April, Compute North revealed that the company was building a 300 megawatt (MW) data center in Texas. Months ago, through the end of 2021, Compute North entered into a contract with Marathon Digital Holdings (NASDAQ: MARA ), where the two firms plan to host more than 100,000 application-specific integrated circuit (ASIC) miners in data centers around the country.
Recent Chapter 11 bankruptcy protection filings show that Compute North is now dealing with financial issues. Speaking to Bloomberg’s Steven Church and David Pan, Compute North’s marketing and sustainability team leader Kristian Mjolsnes explained that the company is looking to stabilize operations.
Compute North “seeks the opportunity to stabilize the business and implement a comprehensive restructuring process,” Mjolsnes said. “[It] It will enable us to continue serving our customers and partners and make the necessary investments to achieve our strategic objectives, explained the company’s executive.
The bankruptcy filing follows the company raising nearly $410 million in equity and debt funding this year. In addition, Compute North had to deal with falling bitcoin (BTC) prices, and at the end of June it was reported that $4 billion worth of bitcoin mining loans were in trouble. Falling prices of bitcoin and crypto assets have led to a number of losses from digital currency lenders and cryptocurrency-backed hedge funds.
Mara’s stock was cut on Compute North’s latest bankruptcy filing, with Marathon saying North’s restructuring ‘will not impact mining operations at this time’.
BTIG analyst Gregory Lewis said Compute North’s bankruptcy weighed on Marathon Digital’s stock after he decided to write down equity. Lewis of Compute North said in a recent filing that “MARA weighs in on its ability to increase its hashing capacity. However, in the longer term, Compute North’s bankruptcy could provide an opportunity for MARA to build out its data center infrastructure footprint at an alarming cost. Marathon Digital also took to Twitter to discuss the recent bankruptcy filing.
Marathon Digital “A file was published today related to one of our hosting providers.” He tweeted.. “Based on current information, it is our understanding that this file will not affect our current mining operations. We are contacting the hosting provider and monitoring their progress as they work through this process,” the bitcoin mining company added.
What do you think about Compute North’s bankruptcy filing and Marathon stock drop? Let us know what you think about this in the comments section below.
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