Core Scientific (CORZ) Drops 0.99% to 2025 Low Amid Merger Scrutiny

Core Scientific (CORZ) fell 0.99% on Monday, marking its lowest level since September 2025, with the stock dropping as much as 2.62% during intraday trading. The decline reflects ongoing uncertainty surrounding the company’s proposed merger with CoreWeave, which has drawn legal and shareholder scrutiny. The all-stock transaction, valued at $9 billion, has sparked debates over its fairness and potential dilution of shareholder value.

Legal challenges have intensified as Kahn Swick & Foti, a shareholder law firm, investigates whether the merger terms adequately compensate Core Scientific shareholders. Under the agreement, CORZ holders would receive 0.1235 shares of CoreWeave Class A stock per share, a structure critics argue undervalues the company. The probe has heightened investor anxiety, particularly as regulatory approvals remain pending and the deal’s success hinges on realizing synergies in AI infrastructure. Delays or rejections could further erode confidence.

Institutional investors have taken divergent stances on the merger. Two Seas Capital, a major stakeholder, has publicly urged shareholders to oppose the deal, citing concerns over valuation and equity dilution. Meanwhile, firms like Vanguard Group and Invesco have increased holdings in CORZ, signaling cautious optimism, while others, including Comerica Bank, have reduced positions. These conflicting signals have amplified market volatility, as investors weigh the risks of the merger against the company’s standalone prospects.

Analyst sentiment has also pressured the stock. Recent downgrades from firms like Roth Capital and Macquarie highlight concerns over Core Scientific’s profitability and debt burden. The company reported a negative net profit margin of -229.98% and long-term debt of $1.166 billion, raising questions about its operational efficiency. While the merger aims to accelerate AI infrastructure development, skeptics question whether the combined entity can deliver promised benefits or address underlying financial weaknesses.

Market perception remains mixed, with regulatory and competitive risks further complicating the outlook. The AI sector’s rapid evolution and dominance by tech giants like Nvidia and Google pose challenges for the merged entity. Investors are adopting a wait-and-see approach, balancing optimism about AI-driven growth with skepticism over execution and value creation. Until legal, regulatory, and operational uncertainties are resolved, the stock’s trajectory will likely remain volatile, reflecting a cautious stance toward the merger’s long-term viability.