Core Scientific stock fell by over 19% and CoreWeave stock fell by more than 4% after the announcement.
Bitcoin mining stocks tumbled as Nvidia-backed CoreWeave agreed to acquire Bitcoin miner and data center infrastructure provider Core Scientific on Monday.
Core Scientific (CORZ) stock price fell nearly 20%, creating a domino effect on the crypto mining stocks, including CleanSpark, MARA Holdings, Riot Platforms, and others.
Artificial intelligence hyperscaler CoreWeave and Core Scientific signed a definitive agreement under which CoreWeave will acquire Core Scientific in an all-stock deal. The all-stock deal was valued at approximately $9 billion.
CoreWeave stock fell about 4% on Monday while Core Scientific stock plummeted about 20%.
At the time of writing, CORZ stock price was trading 16% down at $15.14. The 24-hour low and high were $13.65 and $15.94, respectively. Core Scientific stock has rallied over 20% in a few weeks.
Meanwhile, CRWV was trading 2.60% down at $160.73. The 24-hour low and high were $155.27 and $163.66, respectively.
Stocks fell due to investor skepticism about the deal’s immediate financial impacts. Since the transaction was all-stock, any decline in CoreWeave’s stock price directly impacts the perceived value for Core Scientific shareholders, potentially triggering further selling.
CoreWeave CEO Michael Intrator said the move will eliminate $10 billion in future lease obligations and significantly enhance operating efficiency.
Bitcoin mining stocks, especially U.S. publicly listed stocks, fell 6-10% on reports of the acquisition deal.
$5.85 billion MARA Holdings (MARA) stock dropped over 6% with the price trading at $16.61 at the time of writing.
Riot Platforms (RIOT) stock was 5.91% down at $11.47, CleanSpark (CLSK) fell 7.43% to $11.34, and Cipher Mining (CIFR) stock tumbled 7.59% to $5.60.
Meanwhile, TeraWulf (WULF) stock price plunged more than 10% with the price changing hands at $4.72.
Bitcoin’s failure to hold above $109K also impacted Bitcoin mining stocks. At the time of writing, BTC price was trading 0.55% down at $108,210. Traders anticipate a sluggish price action in the largest crypto asset despite inflows and corporate Bitcoin treasury announcements.
CoreWeave will acquire Core Scientific in an all-stock transaction. Under the terms of the merger agreement, Core Scientific stockholders will receive 0.1235 newly issued shares of CoreWeave Class A common stock for each share of Core Scientific common stock based on a fixed exchange ratio.
CoreWeave aims to verticalize its data center footprint to future-proof revenue growth and enhance profitability.
“This acquisition accelerates our strategy to deploy AI and HPC workloads at scale,” said Michael Intrator, CoreWeave’s Chief Executive Officer, Chairman of the Board, and co-founder.
The company needs to significantly enhance operating efficiency and de-risk future expansion amid the rising AI demand and growth.
The deal is expected to close in the fourth quarter this year, but will be subject to customary closing conditions, including regulatory approval and approval by Core Scientific stockholders.
Core Scientific stockholders will receive 0.1235 newly issued shares of CoreWeave Class A common stock. This represents a $20.40 per share value based on the closing price of CoreWeave Class A common stock as of July 3, and a premium of approximately 66% to the unaffected Core Scientific closing share price of $12.30 on June 25.
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