Core Scientific Stock Heads For Worst Week In Nearly 3 Months Amid Crypto Selloff, CoreWeave Deal Uncertainty — But Retail Stays Upbeat

• Core Scientific derives a bulk of its total revenue from digital asset self-mining and hosted mining.
• Core Scientific shareholders are scheduled to vote on the deal to be bought by CoreWeave in a special meeting to be held on Oct. 30.
• CEO Michael Intrator reportedly clarified in an interview this week that CoreWeave would not sweeten its offer.

Core Scientific (CORZ) stock is on track to rebound from Wednesday’s steep sell-off, with retail sentiment remaining upbeat. Following Wednesday’s 7.4% plunge, CORZ stock is headed for its worst week since early August.

Dover, Delaware-based Core Scientific, a data center infrastructure and crypto mining company, has agreed to be taken over by Nvidia-backed CoreWeave (CRWV) in an all-stock transaction. Core Scientific shareholders would receive 0.1235 newly-issued Class A common stock for every CORZ stock they hold, translating to a total deal value of about $9 billion compared to Core Scientific’s current market capitalization of $5.471 billion.

Buoyed by artificial intelligence (AI)-related demand for infrastructure and the CoreWeave deal, the stock has been on a broader uptrend since the post-tariff lows seen in early April. The stock had hit an all-time high of $20.36 (intraday) on Oct. 16 but has since retreated from the peak.

What’s Ailing CORZ Stock 

The recent weakness in Core Scientific stock may be partly attributed to the crypto market's weakness amid an uncertain geopolitical backdrop. Bitcoin has lost about 14% from its Oct. 6 peak of $126,198.07, indicating it is in correction territory.

Core Scientific derives a bulk of its total revenue from digital asset self-mining and hosted mining. The second-quarter results released in early August showed that roughly 87% of the total revenue of $78.6 million was derived from these two segments. Colocation revenue related to high-performance computing hosting contributed only $10.6.

Additionally, proxy advisory firms ISS and Glass Lewis have opposed the CoreWeave deal, urging Core Scientific shareholders to vote against the latter’s sale to the former.

In a statement, Glass Lewis said, “The market's prolonged discount of the deal's implied value to Core Scientific's share price—combined with the absence of any mechanisms to mitigate downside risk—indicates that the proposed exchange does not adequately compensate Core Scientific shareholders for the risks inherent in the CoreWeave consideration.”  Two Seas Capital, one of the largest Core Scientific shareholders, has also opposed the proposed transaction.

Responding to the development, CoreWeave said in a statement released late Wednesday that it disagreed with the proxy firms’ rejection call. “While neither ISS nor Glass Lewis questions the strategic merit of the transaction, both base their recommendations largely on the current Core Scientific stock price and overlook the risks of a standalone Core Scientific,” it said.

In a CNBC interview CEO, CoreWeave CEO Michael Intrator said earlier this week that Core Scientific would be a “nice to have” rather than a necessity, adding that CoreWeave would not sweeten its offer.

What Retail’s Feeling About Core Scientific Stock

On Stocktwits, retail sentiment toward Core Scientific stock remained ‘bullish’ as of early Thursday, although down from the ‘extremely bullish’ sentiment seen from a week ago. The message volume on the CORZ stream remained ‘high.’

A user expects Two Seas to call a special shareholder meeting if the merger proposal is rejected, to remove the full slate of directors and name a new CEO.

Another user, however, said there is no future for Core Scientific if the deal does not go through.

Core Scientific shareholders are scheduled to vote on the deal in a special meeting to be held on Oct. 30. The original timeline for the completion of the agreement is the fourth quarter.

In overnight trading, Core Scientific stock rose 1.12%, according to Yahoo Finance. The stock has gained about 27% so far this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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