Core Scientific, one of the world’s largest publicly traded mining companies, on June 3 rejected an unexpected and unsolicited acquisition offer from AI computing and cloud services provider Coreweave.
In a press release, Core Scientific announced that after carefully considering the unsolicited $5.75 per share offer, its board of directors rejected the offer, citing its poor value to the mining company.
“The Board of Directors has evaluated the Company’s growth prospects and short- and long-term value creation potential in relation to the previously announced CoreWeave Agreement and Proposal. The Board has determined that the CoreWeave Proposal significantly undervalues the Company.”
Core Scientific concluded that the transaction “is not in the best interest of the company and its shareholders.”
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The proposed acquisition follows a series of long-term business transactions between the two companies, the most recent of which allowed Coreweave to lease 18% of Core Scientific’s infrastructure for 12 years.
In a bid to diversify its revenue streams, Core Scientific signed a lease agreement with Coreweave in March 2023, agreeing to lease one of its Tier-3 data centers to the AI and cloud computing company.
Located in Austin, Texas, this data center provides 16 MW of capacity for Coreweave to run high-performance AI computing services.
In December 2022, Core Scientific filed for Chapter 11 bankruptcy at the height of the cryptocurrency bear market. Like many other mining companies, Core Scientific was affected by high energy prices, low Bitcoin (BTC) prices, and other bankruptcies plaguing the industry at the time due to high debt and poor market conditions.
Core Scientific was relisted on the stock exchange in January 2024 following a 13-month restructuring process. However, immediately after the relisting, the company’s stock price fell 30%.
From its relisting in January until the end of May, Core Scientific’s stock price traded well below the high of $6.10 per share recorded at the time of the relisting.
The mining company’s fortunes reversed in late May and early June after Core Scientific reported improved financials for the first quarter of 2024, bringing total revenue for the quarter to $179.3 million. Core Scientific’s stock price has surged to its highest since its relisting and is currently trading at around $8.02.
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