Hudson Labs provides machine-learned forensic risk assessment tools and advanced SEC filing navigation. Our proprietary risk scores and red flags predict price collapse. Learn more on our Research & White Papers page.
Hudson Labs started predicting a price collapse at Core Scientific as early as late 2021. We assigned the company a very high risk score. Risk scores as high as the one at Core Scientific are rare.
Since then, Core Scientific stock price dropped from over $8 in March 2022 to only 12 cents in December 2022. Not only that, Core Scientific was forced to file for bankruptcy.
In addition to Core Scientific’s high Hudson Labs Risk Score, we flagged multiple high severity red flags to our subscribers.
Hudson Labs' algorithms identified qualitative red flags at Core Scientific in early 2022, including:
Material control weaknesses - The company had disclosed that it has ineffective internal controls due to:
Inadequate resources with sufficient accounting knowledge.
A lack of segregation of duties over posting journal entries.
A lack of segregation of duties over digital asset custody.
Management turnover -
CEO resignation in May 2021.
CFO resignation in April 2022.
Board resignation in November 2022.
Non-timely filings - The company has filed a notification of late filing (NT) four times since May 2021.
Goodwill impairment - Core Scientific recorded an impairment of goodwill totaling almost $1 billion during 2022 relating to its crypto mining segment.
The Hudson Labs team highlighted a few of these red flags in a Twitter thread in August 2022:
A snapshot of Hudson Labs' machine-learned red flags from early 2022, as shown on our web platform
