Talks of CoreWeave acquiring Core Scientific have been circling for a while even though the first attempt failed. With multi billion-dollar contracts in place and overlapping infrastructure footprints, many figured it was only a matter of time. Now it’s official: CoreWeave (CRWV) is acquiring Core Scientific (CORZ) in an all-stock deal valued at ~$9B.
On paper, that sounds bullish, but investors hit the sell button. The following are my 2-cents about the pullback.
What’s the Deal?
Core Scientific shareholders will receive 0.1235 newly issued shares of CRWV for each CORZ share. At CoreWeave’s closing price of on July 3, the deal implies a total equity value of approximately $9.0 billion, which values CORZ at $20.40 per share-a 13.14% premium to CORZ’s pre-announcement price of $18.03.
At face value, a 13% spread might seem reasonable. However, several underlying concerns appear to have driven the negative reaction.
1. All-Stock Structure Brings Uncertainty
The deal is tied to CoreWeave’s stock price. If CRWV falls before the deal closes (expected in Q4), CORZ holders take the hit. That 13% premium could vanish-or flip to a discount.
On the flip side, if CRWV rallies, CORZ investors benefit. But betting on that is speculative, especially given CoreWeave’s current financials.
2. CoreWeave Might Be Overvalued
CoreWeave posted $981.6M in Q1 revenue, up nearly 5x YoY. However, despite explosive top-line growth, the company posted a net loss of $314.6M in Q1.
Moreover, Customer A made up 72% of revenue for the quarter - customer concentration is pretty high.
Its adjusted annualized run-rate loss is >$1B, and the business is heavily leveraged - $8.7B in net debt and over $3B in lease liabilities. The sharp increase in valuation since IPO (+299.25% YTD) seems to reflect AI market hype more than sustainable fundamentals.
If that momentum slows, so could CRWV’s stock-and with it, CORZ’s value in the deal.
3. Lack of Bitcoin Exposure
The biggest red flag for some investors: CoreWeave may pivot Core Scientific away from Bitcoin mining. The press release hints at “repurposing” data centers for AI and HPC. For those wanting Bitcoin exposure, this deal feels more like an exit than a growth opportunity.
4. Is 13% Premium Enough?
Recently the Bitcoin mining stock sector has been outperforming Bitcoin itself, with many mining stocks are gaining momentum. CORZ, one of the Industry leaders, may have more upside on its own than what this deal offers.
A 13.14% fixed upside over several months-while taking on CRWV’s volatility-just isn’t compelling enough for many.
Final Thoughts
From a business standpoint, the deal is logical - CoreWeave gains 1.3 GW of total gross power, deep operational expertise, and eliminates $10B in future lease obligations. It vertically integrates data center control, unlocking an estimated $500M in annual run-rate cost savings by 2027.
But the deal serves CoreWeave’s AI ambitions - not necessarily CORZ shareholders’ interest in Bitcoin mining.
With both boards approving and the strategic logic aligning for CoreWeave, the merger is likely to close in Q4 2025 pending regulatory and shareholder approvals. However, the all-stock structure, valuation dependency, and potential pivot away from Bitcoin mining likely explain the sell-the-news reaction.
If the deal closes as structured, Core Scientific may become yet another crypto-native infrastructure player absorbed into the broader AI trend - reducing pure-play exposure in the public mining stock sector.
Disclaimer: The views expressed in this article are my own and are based on publicly available information. This content is intended for informational purposes only and should not be construed as investment advice. Readers are encouraged to conduct their own research before making any investment decisions. Past performance is not indicative of future results. No recommendation or advice is being provided as to the suitability of any investment for any particular investor.
