TL;DR
Two Seas Capital, the largest active shareholder in Core Scientific, opposes the proposed $9 billion all-stock acquisition by CoreWeave, calling the valuation inadequate.
They warn the deal exposes shareholders to significant risk due to CoreWeave’s stock volatility and argue the offer undervalues Core Scientific’s long-term potential, especially amid growing AI and crypto infrastructure demand.
Two Seas plans to vote against the deal and urges others to do the same.
Core Scientific, a major player in bitcoin mining and high-performance computing, faces opposition from its largest active shareholder regarding its proposed acquisition by CoreWeave. Two Seas Capital, holding over 6% of Core Scientific’s shares, rejected the $9 billion all-stock deal announced in July, arguing it undervalues the company and puts shareholders at financial risk.
The acquisition would combine Core Scientific’s 1.2 GW data-center network with CoreWeave’s AI-compute operations, serving clients like OpenAI and Microsoft. While this merger could enhance AI infrastructure, Two Seas insists the deal disproportionately benefits CoreWeave shareholders, giving Core Scientific owners less than 10% of the combined company and leaving them vulnerable to CoreWeave’s share price fluctuations.
Concerns About Valuation And Shareholder Exposure
Two Seas highlighted that the deal offers Core Scientific shareholders 0.1235 CoreWeave Class A shares per share, an arrangement without protections against volatility or value erosion. This “uncollared” structure means investors face uncertainty about the true worth of their holdings post-merger.
After the deal was announced, Core Scientific’s stock price dropped by 30%, which Two Seas interprets as clear market skepticism. The firm stresses the board should seek a transaction reflecting the company’s strategic value, especially given Core Scientific’s strengths in energy-efficient data centers and its role in supporting AI and blockchain technologies.
Support For Growth And Innovation In Crypto Infrastructure
Despite opposing the current terms, Two Seas Capital remains a supporter of Core Scientific’s potential to drive value in the fast-evolving crypto and AI sectors. The firm, which increased its stake in Core Scientific over the past 18 months, recognizes the company’s advantages.
Two Seas is not fundamentally against a merger with CoreWeave but calls for a fairer valuation and deal structure that rewards Core Scientific shareholders. With AI and crypto mining continuing to intersect as critical technologies, future growth opportunities for Core Scientific remain significant, provided shareholders’ interests are safeguarded.
The decision on this deal will be made later this year after the upcoming shareholder vote and regulatory review. Until then, Two Seas plans to rally shareholders to reject the current proposal in favor of securing a more balanced and value-reflective agreement.