Street Calls of the Week
NEW YORK - Two Seas Capital LP, Core Scientific’s largest active shareholder, announced Monday it has filed a definitive proxy statement with the SEC opposing the company’s proposed sale to CoreWeave on terms announced July 7, 2025. The opposition comes despite Core Scientific’s strong market performance, with the stock up 125% over the past six months and currently trading at $16.85, according to InvestingPro data.
In a letter to shareholders, Two Seas urged investors to vote against the transaction, citing an "inadequate valuation, deficient structure and flawed process." The investment firm highlighted that Core Scientific’s stock plunged 18% on the deal announcement, which it described as "one of the worst one-day price declines for an M&A target this century."
Two Seas, which manages approximately $1.6 billion in assets, expressed disappointment that Core Scientific’s board agreed to sell without contacting other potential buyers. The firm stated the deal "fully exposes Core Scientific shareholders to CoreWeave’s highly volatile stock."
"Core Scientific is uniquely positioned to capitalize on the significant demand for high-performance computing infrastructure given its significant scale, ready access to low-cost power and data center talent," Two Seas wrote in its letter, arguing that the company’s "standalone future" was being cut short by the transaction.
The investment firm also criticized the deal’s structure, noting that while company executives would benefit from "immediate vesting and reimbursement of excise taxes upon close," shareholders would not receive fair value for their investment.
Two Seas is soliciting votes on its GOLD proxy card against the proposed merger ahead of Core Scientific’s upcoming special shareholder meeting.
The information in this article is based on a press release statement from Two Seas Capital LP. For deeper insights into Core Scientific’s valuation metrics, financial health scores, and expert analysis, access the detailed Pro Research Report available exclusively on InvestingPro, covering over 1,400 US stocks with actionable intelligence for smarter investing decisions.
In other recent news, Core Scientific reported its second-quarter 2025 results, missing revenue expectations but exceeding adjusted EBITDA estimates. Jefferies responded by raising its price target for Core Scientific to $22, maintaining a Buy rating due to the company’s acquisition outlook. Meanwhile, the proposed acquisition of Core Scientific by CoreWeave has stirred controversy, with Two Seas Capital, the largest active shareholder, opposing the deal. Two Seas Capital argues that the all-stock transaction undervalues Core Scientific and poses significant economic risks to shareholders.
Following the acquisition announcement, JMP Securities downgraded Core Scientific from Market Outperform to Market Perform, citing limited upside potential after the news. Bernstein SocGen Group, however, reiterated its Outperform rating with a $17 price target, aligning with the acquisition’s valuation of Core Scientific at approximately $9 billion in equity. JMP Securities also noted Core Scientific’s strategic pivot toward high-performance computing as a positive development, even as uncertainties around the acquisition linger. These developments reflect a dynamic period for Core Scientific, with mixed reactions from analysts and stakeholders.
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