Two Seas Capital, Core Scientific's (CORZ) third-largest shareholder with a 6.3% stake, has expressed opposition to the company's proposed all-stock acquisition by AI cloud provider CoreWeave (CRWV). In a letter, Two Seas stated its intention to vote against the deal, citing concerns that it undervalues Core Scientific and exposes shareholders to significant economic risk.
Key Concerns:
- Undervaluation: Two Seas believes the all-stock transaction unfairly favors CoreWeave and fails to reflect Core Scientific's strategic position in high-performance computing (HPC) infrastructure.
- Lack of Cash Component: The deal's structure, with no cash component, is seen as unfavorable to Core Scientific shareholders.
- Investor Concern: Core Scientific's 30% stock drop following the deal announcement is cited as evidence of investor unease.
Two Seas' Position:
- Long-term Support: Two Seas has backed Core Scientific since 2022 and believes in its long-term value.
- Alternative Bids: The firm urges the board to pursue alternative bids, including from CoreWeave, but only at terms that reflect the full strategic value of Core Scientific's assets and growth prospects.
Market Reaction:
- CORZ Trading: Core Scientific's stock is trading at $14.24, substantially below its value at the time of the proposed acquisition.