Two Seas Capital to vote against proposed sale of Core Scientific

Two Seas Capital, an alternative investment management firm that identifies itself as “the largest active shareholder” of Core Scientific (CORZ), announced its opposition to the company’s proposed sale to CoreWeave (CRWV) on the terms announced on July 7. In an open letter to fellow Core Scientific shareholders explaining why it opposes the transaction, the firm stated in part: “We are not philosophically opposed to a merger of these two parties. We are also investors in CoreWeave, believe in its strategy, and respect its management team. Moreover, we have advocated for this combination as we clearly recognize the strategic merits. However, from our perspective as a shareholder of Core Scientific, the proposed sale materially undervalues the Company and unnecessarily exposes its shareholders to substantial economic risk. In our view, the transaction decidedly and unfairly favors CoreWeave at the expense of Core Scientific shareholders. The fact that Core Scientific’s stock price declined by 30% in the days following the transaction announcement strongly suggests to us that other investors agree… To be clear, we welcome all suitors, including CoreWeave, to bid on Core Scientific. The Board’s job, however, is to ensure that any such deal happens at a price that reflects the strategic value of the Company’s assets – including the value of any synergies, the existence of which CoreWeave has already acknowledged. In our view, the current transaction does not come close to meeting that standard. Accordingly, unless the terms are revised to address what we believe to be both the structural shortcomings and inadequate consideration, we intend to vote against the transaction and plan to solicit you, our fellow Core Scientific shareholders, to do the same. We do not believe this transaction should receive shareholder approval.”