Hedge fund Two Seas Capital has formally opposed CoreWeave’s approximately $9 billion acquisition offer for Bitcoin miner and infrastructure provider Core Scientific Inc. (CORZ), asserting the proposal significantly undervalues the company and presents potential economic risks to shareholders.
Two Seas Capital, which holds a 6.5% stake in Core Scientific, detailed its objections in a letter to the company’s board. The shareholder contends that CoreWeave’s bid fails to account for Core Scientific’s significant growth potential, particularly within the high-growth markets for artificial intelligence (AI) and high-performance computing (HPC) infrastructure.
Core Scientific’s stock exhibited considerable volatility around the buyout news. Shares initially plummeted 30% following the public announcement of CoreWeave’s offer. However, they rebounded 3% after Two Seas Capital revealed its opposition, indicating investor uncertainty about the deal’s valuation.
CoreWeave, primarily a cloud computing provider catering to AI workloads, has reportedly made multiple offers to acquire Core Scientific, all previously rejected by Core Scientific’s board as undervaluing the firm. The latest proposed bid valued at $9 billion was reportedly submitted in July.
The opposition highlights the stark difference in scale between the two companies. CoreWeave commands a substantial $58.1 billion market capitalization, significantly larger than Core Scientific’s current $4.3 billion valuation. This disparity underscores Two Seas Capital’s argument that Core Scientific possesses substantial untapped value.