CoreWeave Acquisition Deal in Jeopardy Amid Falling Stock Price

CoreWeave announced a $9 billion deal to acquire Core Scientific in an all-stock transaction. However, the deal has been vulnerable to a falling share price, with CoreWeave stock down 40% since its Q2 results. A large shareholder, Two Seas Capital, opposes the deal on its original terms, and any renegotiation could be costly for CoreWeave. The deal is at risk, causing investors to punish CoreWeave shares, with the stock down 11% today.

CoreWeave's $9 billion acquisition of Core Scientific, announced in August, has sparked intense debate and market volatility. The all-stock deal, aimed at consolidating AI infrastructure dominance, is facing significant challenges, including shareholder opposition and regulatory scrutiny.

The merger aims to create a powerhouse in the AI infrastructure sector by combining CoreWeave's cloud computing and AI capabilities with Core Scientific's 1.3 GW of gross power capacity and 1 GW expansion potential [1]. The strategic rationale behind the deal is to reduce bottlenecks and secure cost advantages in a market projected to grow exponentially. By eliminating over $10 billion in future lease costs and unlocking $500 million in annual savings by 2027, the combined entity could accelerate CoreWeave's AI offerings and future-proof its operations against increasing demand [1].

However, the merger's all-stock structure has drawn criticism, particularly from Core Scientific's largest active shareholder, Two Seas Capital, which holds a 6.3% stake in Core Scientific. Two Seas Capital opposes the deal, citing concerns about dilution and the lack of a price collar or cash component [2]. The share swap ratio of 0.1235 shares of CoreWeave for each share of Core Scientific leaves Core Scientific shareholders exposed to CoreWeave's stock volatility without downside protections [2]. If CoreWeave's stock continues its recent 30% decline, Core Scientific shareholders could end up owning less than 10% of the combined company [2].

Market reactions to the merger announcement have been turbulent. Core Scientific's stock plummeted 30% in the days following the deal's announcement [2], while CoreWeave's shares have swung between gains and losses amid speculation about regulatory outcomes [3]. The upcoming shareholder vote in autumn 2025 will be a critical test of investor sentiment. If dissenting shareholders block the deal, CoreWeave may need to renegotiate terms, potentially offering cash components or price collars to secure approval [2].

Regulatory hurdles add another layer of uncertainty. The merger requires approval from the Federal Trade Commission (FTC) and the Department of Justice (DOJ), with the HSR notification deadline expiring on August 25 [2]. While the companies remain optimistic about a Q4 2025 close, antitrust scrutiny in the AI sector could delay or derail the deal [2].

If the merger succeeds, the rewards could be transformative. CoreWeave's market capitalization has surged to $50.34 billion as of August 29, 2025, reflecting investor confidence in its AI infrastructure vision [1]. The acquisition would amplify this momentum by consolidating Core Scientific's power capacity into CoreWeave's operations, enabling faster deployment of AI models and reducing reliance on external providers. Moreover, the combined entity's cost structure could become a moat against competitors, solidifying its leadership in the AI infrastructure space [3].

However, the deal is at risk. CoreWeave's stock has fallen 40% since its Q2 results, and the stock is down 11% today due to investor concerns about the merger's viability [3]. The upcoming regulatory approval and shareholder vote will be critical determinants of the merger's fate. If the deal falters, the fallout could be severe for both companies—and the broader market's confidence in AI infrastructure consolidation.

References:
[1] CoreWeave to Acquire Core Scientific [https://www.coreweave.com/news/coreweave-to-acquire-core-scientific]
[2] Inside Arbitrage M&A Deal Metrics [https://www.insidearbitrage.com/deal-metrics/CORZ/3182/core-scientific-inc-to-be-acquired-by-coreweave-inc/?t=alw]
[3] Core Scientific's largest active shareholder opposes $9 billion sale to CoreWeave [https://www.theblock.co/post/366149/bitcoin-miner-core-scientific-coreweave]
[4] CoreWeave: An Unexpected Leap [https://stockstotrade.com/news/coreweave-inc-crwv-news-2025_08_27/]
[5] CoreWeave, Inc. (CRWV) Stock Price, News, Quote & History [https://finance.yahoo.com/quote/CRWV/]