Core Scientific rejects unsolicited bid to buy Coreweave
Core Scientific, one of the world's largest mining companies, on June 3 rejected an unexpected and unsolicited acquisition offer from Coreweave, an AI computing and cloud services provider.
Core Scientific said in a press release that after carefully considering the unsolicited offer of $5.75 per share, the board rejected the offer, citing its low valuation of the mining company.
“The Board has evaluated the Company's growth prospects and potential for near- and long-term value creation in relation to the previously announced CoreWeave deals and proposals. The Board has determined that the CoreWeave Proposal significantly undervalues the Company.”
Core Scientific concluded that the deal “is not in the best interest of the company and its shareholders.”
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The acquisition deal follows a series of long-term commercial agreements between the two companies, the most recent of which allowed Coreweave to lease 18% of Core Scientific's infrastructure over 12 years.
In an effort to expand revenue streams, Core Scientific has signed a lease with CoreWave through March 2023, agreeing to lease one of its Level 3 data centers to the AI and cloud computing company.
Located in Austin, Texas, this data center has 16 megawatts of capacity to run CoreWave's high-performance AI computing services.
In December 2022, Core Scientific filed for Chapter 11 at the height of the crypto bear market. Like many other mining companies, Core Scientific has been impacted by high energy prices, cheap Bitcoin (BTC) prices and other losses in the industry due to high debt and poor market conditions.
After a 13-month restructuring process, Core Scientific was listed on the stock exchange in January 2024. However, the company's stock fell 30 percent shortly after the listing.
From the January filing through the end of May, Core Scientific's stock price traded well below its record high of $6.10 a share on the relisting.
The mining company's fortunes changed in late May and early June after Core Scientific reported improved financials for the first quarter of 2024, which reported total revenue of $179.3 million for the quarter. Core Scientific's share price has risen to a new high since its re-listing and is currently trading at $8.02.
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