Core Scientific Crashes After CoreWeave Acquisition News – What Spooked Investors?

Key Points

1. CoreWeave's $9B all-stock acquisition of Core Scientific offers a 13.14% premium but ties CORZ's value to CRWV's volatile stock price, creating uncertainty.

2. CoreWeave reported $981.6M in Q1 revenue but posted significant net losses, with 72% of revenue dependent on a single customer, raising concerns about overvaluation.

3. CoreWeave's high leverage ($8.7B net debt and $3B lease liabilities) and adjusted annualized run-rate loss exceeding $1B further fuel skepticism about its financial stability.

4. The deal hints at repurposing Core Scientific's data centers for AI, potentially reducing Bitcoin mining exposure, which disappoints investors seeking Bitcoin-focused growth.

5. Despite the sector's strong performance, the 13.14% premium is seen as insufficient compensation for the risks, including CRWV's volatility and the deal's alignment with CoreWeave's AI goals rather than Bitcoin mining interests.