Core Scientific Rejects $9B CoreWeave Merger, Shares Surge with BTC Holdings

Core Scientific has rejected CoreWeave’s $9 billion merger bid after shareholders failed to approve the deal. This decision keeps the company independent, focusing on its mining operations and high-density data center services amid a volatile crypto and AI market.

• Shareholders voted against the all-stock merger, citing uncertainty from CoreWeave’s fluctuating share prices.
• Core Scientific will continue as an independent entity, holding a treasury of 2,116 BTC and mining 1,990 BTC year-to-date.
• CORZ shares surged to over $23 post-rejection, marking a five-year high despite recent revenue dips.

What Happened with Core Scientific’s Merger with CoreWeave?

Core Scientific’s merger with CoreWeave, a proposed $9 billion all-stock deal, was rejected by shareholders who did not provide the necessary votes for approval. The Bitcoin mining and data center firm announced the outcome, emphasizing its commitment to independence. This rejection follows earlier skepticism from investors, as reported by financial analysts at Bloomberg, highlighting concerns over the deal’s valuation in a turbulent market.

Why Did Core Scientific Shareholders Reject the CoreWeave Bid?

Shareholders viewed the offer as undervaluing Core Scientific, especially given CoreWeave’s recently listed and volatile stock, which eroded the merger’s premium. Investor groups like Two Seas Capital and Institutional Shareholder Services actively campaigned for a ‘no’ vote, arguing the company could thrive independently. CoreWeave declined to sweeten the deal, leading to the formal rejection detailed in upcoming SEC 8-K filings.

Core Scientific’s strengths include its robust infrastructure for high-density colocation and mining, with 1,990 BTC mined year-to-date. Post-bankruptcy reorganization in early 2024, the firm has expanded its treasury to 2,116 BTC. Experts from Reuters note that independence allows focus on lucrative Bitcoin production, which saw rewards diminish in Q3 but remains viable.

CoreWeave, meanwhile, continues growing its AI cloud services, recently securing expanded contracts with U.S. government entities, as per company statements.

Frequently Asked Questions

Why did Core Scientific reject the $9 billion CoreWeave merger offer?

Shareholders rejected the deal due to perceived undervaluation and uncertainty from CoreWeave’s volatile stock prices post-IPO. Activist investors, including Two Seas Capital, lobbied against it, believing Core Scientific’s assets in Bitcoin mining and data centers are better leveraged independently. The company will file details with the SEC soon.

What is the impact of the Core Scientific merger rejection on stock prices?

Following the rejection, Core Scientific’s shares climbed to over $23, a five-year high, reflecting investor confidence in its standalone future. CoreWeave’s stock dipped 5.47% to $132.28 but remains near recent peaks amid AI demand. This shift highlights opportunities in crypto infrastructure without merger dependencies.

Key Takeaways

• Independence Preserved: Core Scientific avoids merger risks, focusing on its 2,116 BTC treasury and mining operations for sustained growth.
• Stock Surge: CORZ hit $23 post-rejection, up from $6.44 lows in April, despite Q3 mining reward declines, signaling market optimism.
• Strategic Outlook: Investors should monitor Q4 earnings for new colocation clients, positioning Core Scientific for AI and crypto expansion without acquisition.

Conclusion

The rejection of the CoreWeave merger by Core Scientific shareholders underscores a strategic pivot toward independent operations in Bitcoin mining and high-performance data centers. With CORZ stock reaching five-year highs and a solid BTC reserve, the company is poised for self-driven innovation in the evolving crypto landscape. As AI infrastructure demand grows, Core Scientific’s focus on core strengths offers promising prospects—keep an eye on upcoming earnings for further insights.