Core Scientific, a prominent mining company listed on the stock market, recently turned down an unexpected takeover bid from Coreweave, a provider of AI computing and cloud services, on June 3.
In a statement released to the public, Core Scientific revealed that they carefully reviewed the unsolicited offer of $5.75 per share and ultimately decided to reject it, citing undervaluation of the company. They determined that the proposed deal did not align with the best interests of the company and its shareholders.
The bid came after a series of business agreements between the two companies, with the latest agreement allowing Coreweave to utilize 18% of Core Scientific’s infrastructure for a period of 12 years. This collaboration was part of Core Scientific’s strategy to diversify its revenue streams. In March 2023, the company signed a lease agreement with Coreweave, granting them access to one of its tier-3 data centers in Austin, Texas. This facility provides 16 megawatts of capacity for Coreweave to operate its advanced AI computing services.
In a setback, Core Scientific had filed for Chapter 11 Bankruptcy in December 2022 during a challenging period for the crypto industry. Like many other mining companies, Core Scientific struggled with high energy costs, low Bitcoin prices, and industry-wide bankruptcies. However, after a 13-month restructuring process, the company was relisted on stock exchanges in January 2024. Despite experiencing a 30% drop in stock value shortly after the relisting, Core Scientific’s fortunes took a positive turn towards the end of May and the beginning of June. The company reported improved financial results for the first quarter of 2024, with total revenues reaching $179.3 million. As a result, Core Scientific’s stock price reached a new high post-relisting and is currently trading around $8.02.
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