Core Scientific Shareholder Opposes $9 Billion CoreWeave Buyout Deal

A significant $9 billion acquisition attempt between CoreWeave and Core Scientific has been thrown into uncertainty after Two Seas Capital, Core Scientific’s largest active shareholder with a 6.5% stake, announced its intention to vote against the deal. The shareholder described the offer as significantly undervaluing Core Scientific and expressed concern that it disproportionately benefits CoreWeave. This opposition has already had an immediate impact, with Core Scientific’s shares rising 3% to $14.38 following the announcement [1].

CoreWeave, a cloud provider specializing in AI and machine learning, is seeking to acquire Core Scientific to leverage its infrastructure and energy capabilities, aiming to rapidly expand its AI data center capacity. The move reflects a growing trend of convergence between crypto mining operations and AI data centers, as both sectors demand robust power and high-performance computing resources [1].

The opposition from Two Seas Capital is not merely about the price but also about the perceived imbalance in value distribution. The firm argues that the terms of the acquisition favor CoreWeave by allowing it to access Core Scientific’s infrastructure at what it considers a bargain price, potentially diluting the value for existing shareholders. This stance highlights a broader principle in corporate finance: active shareholder engagement can significantly influence the outcome of major deals [1].

The situation could unfold in several ways. CoreWeave may be forced to revise its offer to include a higher valuation or more favorable terms to gain shareholder approval. Alternatively, Two Seas Capital may initiate a proxy contest to rally other shareholders and block the deal. If the acquisition fails, CoreWeave may have to pursue alternative strategies for expansion, such as organic growth or partnerships. In the meantime, Core Scientific’s stock is likely to remain volatile as market participants speculate on the deal’s future [1].

The contested deal also underscores the strategic importance of infrastructure in the AI and crypto mining sectors. As demand for AI computing continues to surge, companies with existing energy and data center capabilities are becoming increasingly valuable targets for acquisition. Core Scientific’s position as a leading crypto miner with substantial infrastructure assets makes it an appealing target for firms like CoreWeave aiming to scale quickly in the AI space [1].

This episode reflects the complex dynamics at play in the rapidly evolving tech and financial landscapes, where large-scale acquisitions are subject to the scrutiny of stakeholders who hold a direct financial interest. The outcome of this deal will have broader implications for the crypto mining industry and the AI sector, particularly as firms continue to seek ways to consolidate resources and expand their capabilities [1].

Source: [1] Core Scientific Buyout: Crucial Shareholder Opposition Rocks $9 Billion CoreWeave Deal (https://coinmarketcap.com/community/articles/68951bf94e2eff6d789f4d60/)