Issues Open Letter to Core Scientific Shareholders Outlining Its Belief that the Proposed Transaction Materially Undervalues Core Scientific and Unnecessarily Exposes Shareholders to Substantial Economic RiskNEW YORK, Aug. 7, 2025 /PRNewswire/ -- Two Seas Capital LP ("Two Seas" or "we"), an alternative investment management firm and the largest active shareholder of Core Scientific, Inc. ("Core Scientific" or the "Company") (NASDAQ: CORZ), today announced its opposition to the Company's proposed sale to Cor ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Group 1 - Recent developments surrounding Core Scientific, Inc. (NASDAQ: CORZ) indicate a potentially interesting long-term investment opportunity [1] - The analysis includes a thorough examination of fundamentals, options flow, and dark pool data [1] - The author emphasizes a data-driven approach combined with practical market understanding to identify trends and actionable ideas [1] Group 2 - The author has a background in economics, which aids in understanding global markets and macroeconomic trends [1] - There is a focus on interpreting unusual options activity and leveraging dark pool data to uncover hidden market movements [1] - The goal of sharing research is to connect with like-minded investors and enhance their investment journey [1]

Core Scientific and CoreWeave Merger Investigation - The law firm Wohl & Fruchter LLP is investigating the fairness of the proposed all-stock merger between Core Scientific, Inc. and CoreWeave, where Core Scientific shareholders will receive 0.1235 shares of CoreWeave Class A common stock for each share of Core Scientific they own [1][3] - Since the announcement of the merger, Core Scientific's stock price has decreased by over 25%, dropping from $18.00 per share on July 3, 2025, to $13.48 per share on July 22, 2025 [2][4] - The investigation focuses on whether the Core Scientific Board of Directors acted in the best interests of shareholders in approving the merger, particularly regarding the fairness of the exchange ratio and the disclosure of material information related to the transaction [5]

Core Insights - The article emphasizes the importance of conducting thorough research before making investment decisions, highlighting that past performance does not guarantee future results [2][3]. Group 1 - The article states that the information provided is for informational purposes only and should not be considered as a solicitation to buy or sell securities [2]. - It mentions that investing involves risks, including the potential loss of principal, and encourages investors to consult financial advisors [2][3]. - The article clarifies that the views expressed may not reflect those of the platform as a whole, indicating a diversity of opinions among analysts [3].

Core Viewpoint - CoreWeave is acquiring Bitcoin miner Core Scientific in a $9 billion all-stock deal, which is expected to yield significant benefits with limited risks compared to typical large acquisitions [1][2]. Group 1: Benefits of the Acquisition - The acquisition allows CoreWeave to secure future capacity, achieve operational cost savings, and lower financial costs of capital [2]. - CoreWeave will gain Core Scientific's 1.3 Gigawatt (GW) data center footprint, including 840 Megawatts (MW) leased to CoreWeave and 500 MW of Bitcoin mining infrastructure [3]. - The acquisition includes over 1 GW of future power capacity contracted with power providers, addressing the current bottleneck in AI growth [4]. - CoreWeave will save $10 billion in future lease payments, resulting in over $500 million in annual savings by the end of 2027, translating to an 18 forward P/E multiple on the acquisition value [5][6]. - The combined companies are expected to save "several hundred basis points" on interest rates for future debt financing due to increased size and scale [7]. Group 2: Risk Mitigation - CoreWeave is financing the acquisition entirely with equity, avoiding increased leverage and debt risks [10]. - The high stock price of CoreWeave, which has quadrupled in the past three months, makes the acquisition appear cost-effective [11]. - The automatic realization of cost savings from eliminating $10 billion in future lease payments mitigates typical acquisition risks [12]. Group 3: Core Scientific's Perspective - Core Scientific is pivoting from less profitable Bitcoin mining operations and sees the acquisition as a strategic move to align with CoreWeave's growth in AI [14][16]. - The transition to an AI data center host is seen as a more attractive business model compared to its previous operations [15]. Group 4: Future Outlook - The acquisition is expected to close in the fourth quarter of this year, strengthening CoreWeave's position in the market [17]. - While the acquisition reduces certain risks, CoreWeave's high valuation and relationship with Nvidia still present challenges [18].

Group 1 - Needham downgraded CoreWeave's rating from "Buy" to "Hold," citing that the $9 billion acquisition of Core Scientific is strategically significant but appears overvalued [1] - The acquisition is expected to release an additional 150MW to 200MW of IT capacity for high-performance computing (HPC) and AI workloads [1] - Analysts believe the deal will provide CoreWeave with high-quality underlying infrastructure, reduce capital costs through asset-backed securities financing, save $500 million in annual operating expenses, and bring in an internal data center operations team [1] Group 2 - Following the acquisition announcement, several securities firms, including Stifel and Mizuho, downgraded their ratings on CoreWeave [2] - As of Thursday's market close, CoreWeave's stock fell by 9.64% to $138.29, despite a year-to-date increase of 246% [2]

Core Acquisition Overview - CoreWeave, Inc. has agreed to acquire Core Scientific, Inc. in an all-stock transaction valued at approximately $9 billion, aimed at modernizing AI and high-performance computing infrastructure [1][8] - The acquisition is part of CoreWeave's strategy to deepen vertical integration, accelerate growth, enhance operational efficiency, and achieve long-term market leadership [1] Transaction Details - CoreWeave will issue 0.1235 shares of its Class A common stock for each share of Core Scientific, valuing Core Scientific at $20.40 per share, which is a 66% premium over its unaffected closing price as of June 25, 2025 [2] - The transaction is expected to close in the fourth quarter of 2025, with Core Scientific shareholders owning less than 10% of the combined company post-acquisition [2] Infrastructure and Financial Impact - CoreWeave will gain Core Scientific's 1.3 GW power infrastructure, with an additional 1 GW expansion potential, providing significant growth opportunities for AI infrastructure [2] - The acquisition will allow CoreWeave to eliminate $10 billion in lease obligations, leading to projected annual cost savings of $500 million by the end of 2027 [3][8] - The combination of Core Scientific's capabilities in data center construction and power procurement with CoreWeave's expertise in AI and HPC cloud workloads will create a more vertically integrated company [3] Strategic Acquisitions - CoreWeave is focused on acquisitions to enhance AI advancements across industries, strengthen existing infrastructure, and improve customer engagement, which is expected to lead to higher revenues and shareholder value [4] Competitive Landscape - CoreWeave faces competition from Nebius Group N.V., which is building its AI infrastructure business through organic growth and has raised $72 million for its ventures [5] - Microsoft is a major player in AI infrastructure, investing $16.7 billion in cloud and AI infrastructure in the third quarter of fiscal 2025, further solidifying its position in the market [6] Stock Performance - CoreWeave's shares have gained 282.6% year to date, significantly outperforming the Internet Software industry's growth of 17.7% [7]

Group 1 - Class Action Attorney Juan Monteverde's firm, Monteverde & Associates PC, is investigating Core Scientific, Inc. related to its sale to CoreWeave, Inc. [1] - Upon completion of the proposed transaction, each outstanding share of Core Scientific common stock will be converted into the right to receive 0.1235 shares of CoreWeave Class A common stock [1] - Core Scientific shareholders will own less than 10% of the combined company after the transaction [1] Group 2 - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report and has recovered millions for shareholders [1] - The firm is headquartered in the Empire State Building, New York City, and has a successful track record in trial and appellate courts, including the U.S. Supreme Court [2]

Core View on CoreWeave - CoreWeave's stock has increased by 160% since the last bullish coverage, driven by power-limited and data center supply shortages amid the race for AI leadership [1] - The company is strategically positioned to capitalize on the growing demand for AI infrastructure [1] Leadership & Management Analysis - CoreWeave demonstrates a proven track record in scaling businesses, with smart capital allocation and insider ownership [1] - The company has shown consistent revenue growth and provides credible guidance [1] Market Disruption & Competitive Positioning - CoreWeave possesses a strong technology moat and first-mover advantage in the AI sector [1] - The company benefits from network effects that drive exponential growth and has achieved market penetration in high-growth industries [1] Financial Health & Risk Management - CoreWeave exhibits sustainable revenue growth with efficient cash flow management [1] - The company maintains a strong balance sheet and a long-term survival runway, avoiding excessive dilution and financial weakness [1] Valuation & Asymmetric Risk/Reward - CoreWeave's valuation is assessed through revenue multiples compared to peers and DCF modeling [1] - The company has institutional backing and positive market sentiment, ensuring downside protection with significant upside potential [1] Portfolio Construction & Risk Control - CoreWeave's investment strategy includes core positions (50-70%) in high-confidence, stable plays, growth bets (20-40%) in high-risk, high-reward opportunities, and speculative investments (5-10%) in moonshot disruptors [1]