CoreWeave’s All-Stock Bid for Core Scientific Likely to Draw Shareholder Scrutiny: KBW
CoreWeave (CRWV) is acquiring Core Scientific (CORZ), a bitcoin mining company, in an all-stock deal valued at $20.40 per share. This represents a significant discount compared to traditional data center peers, with an implied FY26E EBITDA multiple of approximately 16x, according to investment bank KBW. The market reacted negatively to the announcement; Core Scientific shares dropped 18%, trading around $14.75, while CoreWeave stock fell 5%.
KBW analysts view the acquisition as opportunistic, leveraging CoreWeave’s substantial post-IPO stock rally (295%). The deal offers CoreWeave strategic advantages, including eliminating over $10 billion in Core Scientific’s lease obligations and generating more than $500 million in annual cost savings by 2027. However, the all-stock nature of the transaction and the unchanged asset base since CoreWeave’s initial, unsuccessful bid have led to concerns.
The transaction values Core Scientific at approximately $9 billion, with Core Scientific shareholders receiving 0.1235 CoreWeave shares for each share held. The deal requires shareholder approval and is anticipated to close in the fourth quarter of 2025. Analyst Bill Papanastasiou from KBW notes potential friction during the shareholder vote due to the lack of a cash component and the perceived undervaluation. Despite this, the absence of competing offers suggests a high likelihood of the deal’s completion.
KBW maintains an “outperform” rating on Core Scientific shares, with a price target of $19. Bernstein, another Wall Street firm, echoed concerns about the valuation, suggesting that shareholders anticipated a higher price and were disappointed by the all-stock structure. Bernstein also holds an “outperform” rating on Core Scientific stock, but with a slightly lower price objective of $17. The significant share price drop following the announcement highlights the market’s mixed reaction to the acquisition’s terms. The deal’s ultimate success hinges on securing shareholder approval, given the expressed concerns regarding the valuation and the lack of a cash component.
