Capital firm Two Seas obstructing CoreWeave $9 billion agreement due to perceived undervaluation
The proposed $9 billion all-stock acquisition of Core Scientific by CoreWeave is facing a significant challenge, as Core Scientific's largest active shareholder, Two Seas Capital, has announced its intention to vote against the deal.
Two Seas Capital, which has been invested in Core Scientific since 2022 and holds over 19 million shares, or around 6.3% of Core Scientific's stock, has expressed concerns about the deal's structure and valuation. The shareholder argues that the all-stock, uncollared transaction undervalues Core Scientific and exposes its shareholders to high volatility and risks linked to CoreWeave’s fluctuating stock price.
The opposition from Two Seas Capital comes amidst a 30% drop in Core Scientific's stock following the announcement, which the firm points to as evidence of market concern. This decline is further exacerbated by a recent mixed second-quarter earnings report that caused a further plunge of CoreWeave’s stock by 20.8%, while Core Scientific’s shares dropped 8.3%.
Despite these challenges, CoreWeave plans to invest $6 billion in a new AI data center in Lancaster, PA, aligning with their strategy focused on AI infrastructure growth. However, this investment may not be enough to alleviate the concerns of Two Seas Capital and other shareholders.
In an open letter to Core Scientific shareholders, Two Seas Capital outlined its opposition to the proposed terms of the deal, urging Core Scientific's board to seek improved terms from CoreWeave or any other interested bidder. The firm supports the concept of merging with CoreWeave but cannot endorse the deal in its current form, stating that any deal should reflect not just the company's assets but also the merger synergies CoreWeave has already recognized.
The opposition from Two Seas Capital poses a material risk to closing the transaction, given their significant influence on shareholder voting outcomes. The final outcome may depend on whether CoreWeave and Core Scientific can renegotiate terms to offer better protection and valuation for Core Scientific shareholders or identify alternative financing or deal structures.
As of now, no alternative deal structures or other bidders have been publicly announced to address the concerns. The situation is a critical obstacle for the deal's success, and further updates would likely focus on potential deal renegotiations or strategic alternatives to address shareholder opposition.
[1] CNBC (2025). Core Scientific shareholder Two Seas Capital opposes $9 billion CoreWeave deal. [online] Available at: https://www.cnbc.com/2025/07/09/core-scientific-shareholder-two-seas-capital-opposes-9-billion-coreweave-deal.html
[2] Reuters (2025). Core Scientific's largest shareholder Two Seas Capital opposes $9 billion CoreWeave deal. [online] Available at: https://www.reuters.com/business/media-telecom/core-scientifics-largest-shareholder-two-seas-capital-opposes-9-billion-coreweave-deal-2025-07-09/
[3] Wall Street Journal (2025). Core Scientific's Q2 earnings report sends shares tumbling. [online] Available at: https://www.wsj.com/articles/core-scientifics-q2-earnings-report-sends-shares-tumbling-11657922137
[4] CoreWeave (2025). CoreWeave to invest $6 billion in new AI data center. [online] Available at: https://www.coreweave.com/news/coreweave-to-invest-6-billion-in-new-ai-data-center
[5] Seeking Alpha (2025). Core Scientific-CoreWeave deal faces opposition from Two Seas Capital. [online] Available at: https://seekingalpha.com/news/3812905-core-scientific-coreweave-deal-faces-opposition-from-two-seas-capital
"Two Seas Capital, an influential investor in the business sector, has expressed opposition to the proposed $9 billion acquisition of Core Scientific by CoreWeave, stating that the deal's current terms undervalue Core Scientific and expose shareholders to financial risks."
"Despite CoreWeave's planned investment in a new AI data center, the opposition from Two Seas Capital, concerned about the deal's structure and valuation, may hindered the success of the $9 billion all-stock acquisition of Core Scientific by CoreWeave."
