Why a $7.3 Million Bet on Core Scientific Looked Smart at Quarter-End but Got Tested 30% Later

Core Investment Activity - PSquared Asset Management established a new position in Core Scientific by acquiring 405,800 shares valued at approximately $7.28 million, representing 5.78% of its U.S. equity assets [2][3][6] Company Overview - Core Scientific operates in the digital asset mining and blockchain infrastructure sector, generating revenue from proprietary mining and third-party hosting contracts [8][9] - The company has a market capitalization of $4.74 billion and reported a revenue of $334.18 million with a net income of -$768.31 million [5] Stock Performance - As of the latest report, Core Scientific shares were priced at $15.29, reflecting a 5.5% increase over the past year, although this performance lags behind the S&P 500, which increased by approximately 15% in the same period [4] Business Model and Strategy - Core Scientific employs a dual business model, mining digital assets for its own account while also providing datacenter colocation and hosting services for institutional clients [8][9] - The company is focusing on expanding hosting contracts and has improved its balance sheet post-restructuring, with a proposed merger with CoreWeave aimed at monetizing its power-heavy data center assets [10] Recent Developments - Following the termination of the merger agreement with CoreWeave due to shareholder disapproval, Core Scientific's shares have fallen nearly 30%, raising concerns about the company's strategic pivot towards high-density colocation and AI-adjacent workloads [11]