Core Scientific’s $9 billion all-stock sale to AI infrastructure provider CoreWeave just hit a major roadblock, and it’s all because the company’s largest active shareholder isn’t having it. Two Seas Capital, which holds around 6.3% of Core Scientific’s shares, has stepped up to block the deal, calling the offer “inadequate” and a raw deal for current shareholders.
In my opinion, it’s hard to ignore the fact that Two Seas is raising some valid points here. They claim the sale “materially undervalues” Core Scientific and leaves shareholders exposed to some serious economic risk. Basically, they’re saying, “Why should we risk it all for a deal that doesn't reflect the true value of the company?”
CoreWeave’s Stock Struggles and Shareholder Concerns
According to Two Seas, the all-stock structure with no collar is a huge problem. Shareholders are left vulnerable to the fluctuating price of CoreWeave’s stock, no safety net, no value protections. After the transaction was announced, Core Scientific’s stock dropped by 30%, and that drop isn’t just coincidental. It’s sparking investor concerns, and Two Seas is calling foul.
So here’s the deal: The $9 billion sale pegs each Core Scientific share to 0.1235 of a CoreWeave share, which at the time of the announcement was worth about $20.4 per share. But CoreWeave’s stock has since dived, down by about 26% to 30%.
That drop has lowered the effective value of Core Scientific’s shares to just over $13 each. Interestingly, Core Scientific shares showed a slight recovery on Thursday, rising 1.7% to $14.35. But that doesn’t change the fact that this deal has some pretty serious red flags for shareholders.
Jeffrey Emanuel, founder of Pastel Network, points out that situations like this aren’t new. In all-stock deals, especially when large shareholders are distressed debt investors who converted bonds into equity, the process tends to get a little... messy. “Activist” shareholders like Two Seas are more likely to push back, which is exactly what’s happening here.
So, what happens next? Well, CoreWeave might not be in a hurry to make changes, especially since they’re benefiting from the inflated stock price. However, with CoreWeave’s IPO lockup expiring soon, the pressure on its share price could be a game-changer.
A shareholder vote on the deal is expected later this year, and depending on how that goes, we could see even more volatility in the stock prices of both companies. Stay tuned, this drama is far from over.
Anastasiia G
Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource, and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice. HODL FM strongly recommends contacting a qualified industry professional.
