Activist Two Seas Capital to oppose Core Scientific's sale to CoreWeave
Two Seas, which owns approximately 6.3% of Core Scientific with 19,122,842 shares, released an open letter to fellow shareholders explaining its stance against the transaction.
In the letter, Two Seas founder Sina (BitStamp:SINA) Toussi expressed disappointment with the Board of Directors' decision to sell at what the investment firm considers an "inadequate valuation." The firm criticized the all-stock, uncollared structure of the deal, stating it leaves Core Scientific shareholders exposed to CoreWeave's share price volatility without value protections.
While not philosophically opposed to a merger between the companies, Two Seas believes the current deal "materially undervalues" Core Scientific and "unnecessarily exposes its shareholders to substantial economic risk." The letter noted that Core Scientific's stock price declined by 30% in the days following the transaction announcement, suggesting other investors share similar concerns.
Two Seas highlighted its belief in Core Scientific's potential to create substantial value in high-performance computing infrastructure, particularly as artificial intelligence drives increasing demand for energy and computing resources. The investment firm stated the company has "a clear runway to compound growth for many years."
Unless the terms are revised to address what Two Seas considers structural shortcomings and inadequate consideration, the firm intends to vote against the transaction and plans to solicit other shareholders to do the same. Two Seas promised to share further perspectives and valuation work in the coming weeks.
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