Core Scientific, a prominent player in the bitcoin mining sector, finds itself in a heated battle over its proposed acquisition by AI cloud provider CoreWeave. The acquisition, announced on July 7, has hit a snag with Two Seas Capital, the third-largest shareholder in Core Scientific, publicly opposing the all-stock deal. Two Seas, holding a 6.3% stake, declared its intention to rally other shareholders against the transaction unless significant amendments are made.
The Core of the Contention
Two Seas Capital’s resistance to the acquisition isn’t without reason. The firm argues that the proposed all-stock, uncollared transaction disproportionately favors CoreWeave, failing to adequately reflect Core Scientific’s strategic prowess in high-performance computing infrastructure. “The proposed sale materially undervalues the company and unnecessarily exposes its shareholders to substantial economic risk,” asserted Sina Toussi, founder of Two Seas. The sentiment is shared by many in the investment community, as evidenced by Core Scientific’s stock, which, despite a modest uptick to $14.24, remains significantly below the $20 it commanded at the time of the acquisition announcement four weeks ago.
This isn’t Two Seas’ first rodeo with Core Scientific. The firm has been a steadfast supporter since 2022, playing a pivotal role in the company’s post-bankruptcy restructuring and financing rounds. Despite their current opposition, Two Seas still believes in Core Scientific’s long-term potential. If a more enticing offer doesn’t materialize, they advocate for Core Scientific to maintain its independence. This mirrors broader industry trends, as discussed in The $3.5B shift: How Bitcoin miners are cashing in on AI, where miners are increasingly leveraging AI to enhance profitability.
Market Ripples and Shareholder Dynamics
The market’s response to the deal announcement was swift and unforgiving, with Core Scientific’s stock tumbling 30%—a stark indicator of investor trepidation. This volatility underlines the broader sentiment of uncertainty surrounding the deal. Analysts at investment bank KBW have weighed in, predicting shareholder pushback on the deal’s terms. The unchanged asset base since CoreWeave’s initial failed bid and the absence of a cash component are at the heart of the skepticism.
Two Seas isn’t entirely dismissive of the idea of a merger. They recognize the potential synergies between the two companies but argue that any agreement must account for the full strategic value of Core Scientific’s assets and growth trajectory. The firm intends to release additional analysis and actively engage with shareholders in the coming weeks, seeking to galvanize a coalition against the current terms. This comes at a time when Bitcoin Miner Profits Hit Highest Monthly Mark Since Halving: JP Morgan, highlighting the financial potential that strategic decisions can unlock.
Navigating the Future
The unfolding drama raises questions about the future trajectory for Core Scientific and its stakeholders. Will other shareholders align with Two Seas’ vision of a better deal, or will they ultimately acquiesce to the proposed merger? The market will be closely watching as the narrative develops.
As the saga continues, Core Scientific and its shareholders face a pivotal decision. The outcome will not only shape the company’s strategic path but also signal broader trends in the cryptocurrency and high-performance computing sectors. One thing’s for certain—this is a story with many chapters yet to be written.
Source
This article is based on: Bitcoin Miner Core Scientific’s Third Largest Shareholder Opposes CoreWeave Deal
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
