Two Seas Capital Opposes Core Scientific–CoreWeave Merger, Calls Deal Undervalued, Risky For Shareholders

by Murtuza J Merchant Benzinga Staff Writer

Zinger Key Points

The firm emphasizes Core Scientific’s long-term value given rising AI demand and scarce computing infrastructure.
Two Seas is calling for revised terms that fairly reflect synergies and ensure balanced economic outcomes for all stakeholders.
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Two Seas Capital, the largest active shareholder of Core Scientific Inc CORZ, on Friday announced it will vote against the proposed all-stock acquisition by CoreWeave CRWV, citing a significantly undervalued offer and structural flaws that expose shareholders to undue risk.

In an open letter released on Thursday, the New York-based investment firm disclosed it holds more than 19.1 million shares, approximately 6.3% of Core Scientific's outstanding stock and criticized the terms of the July 7 deal, particularly the uncollared, all-stock structure, which leaves Core Scientific shareholders vulnerable to CoreWeave's share price volatility.

The firm emphasized it is not opposed to a merger in principle and even holds a position in CoreWeave.

It stressed that the proposed terms overwhelmingly benefit CoreWeave and fail to reflect the strategic value of Core Scientific's assets, including its infrastructure footprint and positioning in the high-performance computing (HPC) sector.

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Two Seas called attention to Core Scientific's strategic importance in the AI infrastructure landscape, highlighting its low-cost power access, data center expertise, and growth potential amid soaring demand for AI-related computing.

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The firm underscored that the company is well-positioned to operate independently and capitalize on market tailwinds.

The letter also noted a sharp 30% drop in Core Scientific's stock following the acquisition announcement, which Two Seas interpreted as a broader market rejection of the deal.

Unless significant changes are made to the valuation and structural terms, the firm intends to rally other shareholders to vote against the deal.

While Two Seas welcomed other potential suitors, including CoreWeave, it urged Core Scientific's board to demand a price that fairly incorporates the company's long-term strategic value and any synergies created through a merger.