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NEW YORK - Two Seas Capital LP, Core Scientific’s largest active shareholder with approximately 6.3% ownership, announced Thursday its opposition to the proposed sale of Core Scientific (NASDAQ:CORZ) to CoreWeave (NASDAQ:CRWV). Core Scientific, currently valued at $4.2 billion with shares trading at $14.07, has shown strong returns over multiple timeframes according to InvestingPro data.
In an open letter to fellow shareholders, Two Seas stated that the all-stock transaction announced on July 7 "materially undervalues the Company and unnecessarily exposes its shareholders to substantial economic risk." The investment firm pointed to the 30% decline in Core Scientific’s stock price following the announcement as evidence that other investors share similar concerns. This perspective aligns with current analyst targets ranging from $15 to $23 per share, suggesting potential upside from current levels. Get deeper insights into Core Scientific’s valuation metrics and more with a InvestingPro subscription, which includes exclusive access to comprehensive Pro Research Reports covering 1,400+ top stocks.
Two Seas founder Sina Toussi wrote that while the firm is not philosophically opposed to a merger between the companies and recognizes strategic merits, the current deal structure "decidedly and unfairly favors CoreWeave at the expense of Core Scientific shareholders." InvestingPro data shows Core Scientific maintains strong financial flexibility with a current ratio of 4.26, indicating substantial liquid assets exceeding short-term obligations.
The investment firm, which manages approximately $1.4 billion in assets, indicated it plans to vote against the transaction unless terms are revised to address what it describes as structural shortcomings and inadequate consideration. Two Seas also intends to solicit other shareholders to vote against the deal.
"We would be happy to continue owning Core Scientific as an independent company for years to come," Toussi wrote, citing growing demand for power and compute infrastructure. "In our view, there is no compelling reason to sell Core Scientific at an underwhelming valuation with a deficient structure."
Two Seas has been invested in Core Scientific since 2022, participated in the company’s rights offering in early 2024, and joined both convertible note issuances. The firm said it currently beneficially owns 19,122,842 shares of Core Scientific common stock.
According to the press release statement, Two Seas plans to further detail its perspectives and valuation work in the coming weeks.
In other recent news, CoreWeave has announced its acquisition of Core Scientific in an all-stock deal valued at $20.40 per share, with the transaction expected to close in the fourth quarter of 2025. This acquisition values Core Scientific at approximately $9 billion in equity, and shareholders will receive 0.1235 shares of newly issued CoreWeave stock for each Core Scientific share. As a result, Core Scientific shareholders will own about 10% of the combined entity. Following the announcement, JMP Securities downgraded Core Scientific from Market Outperform to Market Perform, citing limited upside potential after the acquisition news. Meanwhile, Bernstein SocGen Group has reiterated its Outperform rating on Core Scientific, maintaining a $17.00 price target. DA Davidson reiterated an Underperform rating on CoreWeave, setting a $36.00 price target, after the acquisition announcement. Jefferies speculated that the acquisition is strategically timed for CoreWeave, suggesting a shift toward a more vertically integrated infrastructure portfolio. These developments highlight significant strategic moves and analyst perspectives in the context of the acquisition.
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