CoreWeave-CORE Scientific Merger: Valuation Misalignment and Shareholder Resistance Threaten Strategic Synergy

The proposed $9 billion all-stock merger between CoreWeave (NASDAQ: CRWV) and Core Scientific (NASDAQ: CORZ) has ignited a firestorm of shareholder dissent, driven by stark valuation discrepancies and structural risks. While CoreWeave's management touts the deal as a catalyst for AI infrastructure dominance, investors are questioning whether the fixed exchange ratio and lack of cash consideration fairly reflect Core Scientific's $1.625 billion in assets and 30+ data centers.

Valuation Misalignment: A Clash of Multiples

CoreWeave's 58.7x EV/EBITDA multiple—one of the highest in the tech sector—contrasts sharply with Core Scientific's negative Adjusted EBITDA of -$6.1 million in Q1 2025. The merger's 0.1235 share-for-share ratio, based on CoreWeave's July 3 VWAP of $20.40, implies a 66% premium to Core Scientific's $12.30 unaffected price. Yet, this premium fails to account for Core Scientific's $697.9 million in liquidity and $1.625 billion in total assets, including 250MW of AI-ready colocation capacity.

The disconnect is further underscored by CoreWeave's post-IPO volatility. A 300% stock surge since March 2025 has inflated its valuation, while Core Scientific's share price plummeted to $14.75 post-announcement, reflecting market skepticism. Analysts at KBW argue the deal is a “strategic power play” for CoreWeave, leveraging its inflated equity to acquire infrastructure at a perceived discount.

Deal Risk: Shareholder Resistance and Execution Uncertainty

The absence of a cash component and fixed exchange ratio has galvanized Core Scientific shareholders. With no competing bids, the merger hinges on a shareholder vote—a process complicated by the 66% premium's failure to offset concerns about CoreWeave's debt-laden balance sheet. CoreWeave's $55.495 billion market cap, though impressive, is built on a speculative AI infrastructure narrative, with Q1 2025 EBITDA of $454 million flat year-over-year.

Bernstein's analysis highlights the “structural inequity” of the deal: Core Scientific's asset base has remained unchanged since a prior failed bid, yet the new terms offer no incremental value. This has led to calls for a higher exchange ratio or cash incentives to secure approval. The risk of a delayed or modified deal looms large, with CoreWeave's stock already down 5% post-announcement, signaling investor unease.

Investor Strategy: Navigating a High-Stakes Bet

For CoreWeave shareholders, the merger's success hinges on realizing $500 million in annual cost savings and eliminating $10 billion in future lease costs. However, these synergies are contingent on seamless integration of Core Scientific's crypto-mining facilities into AI workloads—a transition that remains unproven. The company's ability to repurpose Core Scientific's infrastructure will determine whether the 58.7x EV/EBITDA multiple is justified.

Core Scientific holders, meanwhile, face a critical decision. Voting against the deal could force renegotiation, but the lack of alternatives may leave them with a suboptimal outcome. A strategic pivot to cash consideration or a higher share ratio would better align with the company's $1.625 billion in assets and $778.6 million in liquidity.

Conclusion: A Test of Strategic Foresight

The CoreWeave-CORE Scientific merger is a high-stakes test of valuation logic and execution discipline. While the strategic benefits of vertical integration in AI infrastructure are compelling, the valuation misalignment and shareholder resistance highlight significant risks. Investors should closely monitor the shareholder vote and any subsequent adjustments to the exchange ratio. For now, a cautious approach is warranted: CoreWeave's speculative premium may not survive integration challenges, while Core Scientific's intrinsic value could be unlocked through alternative bids or operational repositioning.

In a market where AI hype often outpaces reality, this merger serves as a cautionary tale—reminding investors that strategic synergy is only valuable if underpinned by fair valuation and operational execution.