CoreWeave to acquire Core Scientific in all-stock deal valued at $20.40 per share

Investing.com - Core Scientific Inc . (NASDAQ:CORZ) shares fell approximately 15% to $14.83 on Monday following the announcement that CoreWeave has agreed to acquire the company in an all-stock transaction. The company, currently valued at $5.36 billion, has shown impressive returns with a 75% gain over the past year according to InvestingPro data.

The deal, announced Monday morning, values Core Scientific at $20.40 per share, with shareholders receiving 0.1235 shares of newly issued CoreWeave stock for each CORZ share. This transaction will result in Core Scientific shareholders owning approximately 10% of the combined entity when the deal closes, which is expected in the fourth quarter of 2025. Technical indicators from InvestingPro suggest the stock is currently in overbought territory, with analyst price targets ranging from $15 to $23 per share.

BTIG downgraded Core Scientific from Buy to Neutral following the announcement, noting that many investors had expected the deal to include a cash component of 40%-60% based on the value of the existing HPC contract between the two companies, which BTIG values at $10-$12 per share. Get access to 12 additional exclusive InvestingPro Tips and comprehensive analysis for Core Scientific through the InvestingPro platform.

The merger discussions were first reported in late June, causing Core Scientific shares to rise approximately 40% at that time. CoreWeave, which specializes in high-performance computing and has access to in-demand GPUs, is positioned in a sector that analysts expect to see multi-year growth driven by increasing demand for high-performance computing.

According to BTIG, approximately 30% of CoreWeave’s free-float was shorted as of mid-June, with current borrowing costs on CoreWeave stock at around 150%, making it expensive for investors to hedge the transaction.

In other recent news, CoreWeave has announced its agreement to acquire Core Scientific in an all-stock transaction valued at approximately $9 billion. This acquisition, expected to close in the fourth quarter of 2025, aims to eliminate over $10 billion in future lease overhead for CoreWeave. Jefferies has highlighted the strategic rationale behind this move, suggesting that it could allow CoreWeave to expand its data center capabilities and reduce reliance on third-party developers. Meanwhile, DA Davidson has reiterated an Underperform rating for CoreWeave, expressing concerns about the potential dilutive effects of the acquisition in the near term.

Core Scientific, which emerged from bankruptcy in January 2023, is expanding its data center operations and has been positively rated by Cantor Fitzgerald, which maintained an Overweight rating with an $18.00 price target. Cantor Fitzgerald believes the market undervalues Core Scientific’s partnership with CoreWeave, particularly in the AI and high-performance computing sectors. Additionally, JMP Securities has maintained a Market Outperform rating for Core Scientific, setting a $15.00 price target, citing the company’s significant market capitalization and potential for growth in its high-performance computing business segment.

Jefferies has also suggested that the acquisition could secure Core Scientific’s data center capacity for CoreWeave, providing more opportunities for growth. Both companies have yet to officially comment on the acquisition discussions, but the strategic benefits are being closely analyzed by investment firms. The developments around this acquisition have garnered significant attention, with analysts weighing in on the potential impacts and future prospects for both CoreWeave and Core Scientific.

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