Investment firm Two Seas Capital has opposed the planned $9 billion merger of Core Scientific with CoreWeave, reaching out to the SEC with a letter to shareholders.
Two Seas Capital's Critique of the Merger
Two Seas Capital sent a letter to the Securities and Exchange Commission (SEC) encouraging shareholders to vote against the merger. The letter states that the deal "materially undervalues" Core Scientific and poses significant economic risks to investors. The firm expressed disappointment with Core Scientific’s board for approving the merger and noted that the all-stock, uncollared structure exposes shareholders to CoreWeave's stock price volatility.
Voting Proposals
The upcoming vote will address two key proposals: the first seeks approval of the merger agreement itself, while the second involves a non-binding vote on executive compensation related to the merger. Two Seas Capital recommended voting "AGAINST" both proposals, deeming management’s compensation package excessive and not in shareholders’ best interests.
Growing Investor Discontent
Two Seas Capital's protest signals growing resistance from investors to discounted technology and crypto-related mergers. The outcome of the vote may significantly impact whether Core Scientific continues independently or merges into a future driven by AI with CoreWeave.
Two Seas Capital's concerns may mark a new phase in the relationship between shareholders and management at Core Scientific, highlighting rising apprehensions in the investment community regarding the deal.
