Bit Coin miner Core Scientific's largest active shareholder, Two Seas Capital, released an announcement on August 8th, explicitly opposing the acquisition agreement reached in July with CoreWeave, a cloud and AI infrastructure company known as "Nvidia's favorite child". Two Seas Capital criticized that the transaction significantly undervalues Core Scientific and believes its all-stock transaction structure exposes shareholders to excessive economic risks.
Two Seas Capital's Reasons for Opposing the Acquisition
Two Seas Capital revealed that it currently holds 19,122,842 common shares of Core Scientific, representing approximately 6.3% of the company's shares, making it the largest active shareholder. Two Seas Capital further noted that the company has been investing in Core Scientific since 2022 and has long-term confidence in the company.
Two Seas Capital's main reasons for opposing the acquisition are twofold: First, the transaction acquires Core Scientific at a valuation of $9 billion, which is far below the company's true value as a high-performance computing (HPC) infrastructure pioneer, especially in the context of surging AI demand. Core Scientific possesses large-scale data centers, low-cost electricity, and a professional team, with significant long-term growth potential.
Second, the all-stock transaction without protective structures exposes shareholders to the high volatility risk of CoreWeave's stock price. After the transaction was announced, Core Scientific's stock price dropped by 30%, indicating market doubts about the transaction's valuation.
Supporting Independent Development, Welcoming Other Bidders
Two Seas Capital emphasized that the company supports Core Scientific continuing to operate as an independent company to fully leverage opportunities in the AI era. The announcement stated:
"As the demand for power and computing infrastructure grows at an unprecedented speed while supply remains scarce, we believe the company's most promising days are yet to come. We do not see a compelling reason to sell Core Scientific at an undervalued valuation and with an imperfect structure."
At the same time, Two Seas Capital also stated that it does not oppose the acquisition of Core Scientific, but requires the transaction price to reflect the strategic value of the company's assets, including potential synergies with buyers. The company still welcomes other potential bidders, including CoreWeave, to participate in the bidding and calls on the board to ensure any transaction maximizes shareholder interests. Two Seas Capital plans to vote against the transaction and will mobilize other shareholders to do the same.
CoreWeave and Core Scientific's Acquisition Agreement
On July 7th this year, CoreWeave announced an acquisition of Core Scientific through an all-stock transaction, with a total value of approximately $9 billion. Each Core Scientific common share will be exchanged for 0.1235 shares of CoreWeave Class A common stock, valued at approximately $20.40 per share.
Originally, this transaction is expected to be completed in the fourth quarter of 2025, aiming to help CoreWeave obtain approximately 1.3 GW of data center power capacity from Core Scientific to enhance its AI cloud services capabilities, with an estimated annual cost savings of around $500 million.
