Compute North, which is the main hosting company for mining for Marathon Digital, filed for Chapter 11 protection Thursday afternoon.
After Compute North filed for bankruptcy, BTIG’s Gregory Lewis changed his recommendation for Marathon Digital (MARA) stock from “buy” to “neutral.” This means that there is one less “bull” on Wall Street.
In a note to clients, Lewis said that Compute North is where most of Marathon’s mining rigs are located. The upcoming restructuring is likely to slow the growth of Marathon’s hash capacity in the short term.
Lewis said that the bankruptcy of Compute North could be good news in the long run because it could give Marathon a chance to build a data center infrastructure footprint at “distressed pricing.” Lewis also thinks that the hosting contracts that are already in place will be changed.
Marathon, on the other hand, said late Thursday night on Twitter that the bankruptcy filings won’t affect the mining operations going on now and that the company is in touch with Compute North.
Early on Friday, shares of Marathon Digital are down 5%. This is because the downgrade is happening at the same time that markets are going down and bitcoin (BTC) is going down again to below $19,000.
