CoreWeave to Acquire Core Scientific at $20.40 per Share, Boosting Bitcoin Mining Stocks

CoreWeave, an AI infrastructure firm, has agreed to acquire Core Scientific, a prominent bitcoin miner, in an all-stock transaction. The deal values Core Scientific at approximately $20.40 per share, based on recent closing prices. This acquisition is expected to raise the valuation floor for bitcoin mining stocks, according to a research report by JPMorgan.

JPMorgan analysts Reginald Smith and Charles Pearce noted that the terms and purchase price of this deal are likely to be a one-off, similar to the HPC deal between the two companies announced last summer. They emphasized that the specifics of this transaction are unlikely to be replicated in future deals.

Core Scientific's stock closed at around a 25% discount to the deal terms on the day the takeover was announced. JPMorgan analysts considered this discount appropriate given the projected year-end close for the deal. The bank's analysts also highlighted that the valuation floor for bitcoin mining stocks is expected to rise as a result of this acquisition.

B.Riley, a brokerage firm, downgraded Core Scientific from a buy rating to neutral, maintaining an unchanged price target of $17. The firm's decision takes into account the volatility in CoreWeave shares and the projected 6-month close for the deal. This downgrade reflects the firm's cautious outlook on the stock's performance in the near term.