Some Core Scientific (CORZ) shareholders may not be happy about the software infrastructure company’s planned merger with Cloud computing firm CoreWeave (CRWV) and may push to vote against it. According to a report from CNBC‘s David Faber, certain investors believe that the current exchange ratio undervalues their holdings and are looking for better terms. As a result, these shareholders may campaign to block the deal if their issues aren’t addressed.
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The merger, which was announced earlier this month, involves CoreWeave acquiring Core Scientific in an all-stock transaction valued at roughly $9 billion at the time of the announcement. Under the agreed terms, Core Scientific investors would receive 0.1235 shares of CoreWeave’s Class A common stock for every Core Scientific share they own. However, the fixed exchange ratio is what is causing the dispute, as some holders are pushing for a higher payout.
Whether CoreWeave adjusts the ratio to satisfy investors is unclear, but any significant opposition could create problems when it comes to finalizing the transaction. Nevertheless, the deal, if completed, would combine CoreWeave’s AI-driven data center operations with Core Scientific’s large-scale infrastructure and create a major player in the sector.
Is CRWV a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on CRWV stock based on four Buys, 14 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CRWV price target of $102.94 per share implies 11.3% downside risk.
