Core Scientific Downgraded Following CoreWeave Acquisition
Finance/Markets

Core Scientific Downgraded Following CoreWeave Acquisition

Analysts predict shareholder approval for Core Scientific's acquisition by CoreWeave, proceeding without expected delays.

Core Scientific Downgraded Following CoreWeave Acquisition

Analysts at H.C. Wainwright have lowered their recommendation for Core Scientific from buy to neutral, following the announcement of the all-share acquisition by CoreWeave, a cloud AI provider.

Key Insights:

  • H.C. Wainwright lowered Core Scientific’s rating to neutral due to increased risk exposure tied to the acquisition.
  • The new relationship with CoreWeave increases the volatility linked to Core Scientific’s stock, given its dependency on CoreWeave’s performance moving forward.
  • The deal is predicted to win shareholder support without any anticipated delays in the closing timeline.

Shares of Core Scientific were marked at $15, reflecting an increase of 1.3% at the time of publishing, despite an 18% drop the previous day upon the announcement of the acquisition.

CoreWeave has proposed an acquisition transaction valuing each share of Core Scientific at approximately $20.40, based on the most recent closing prices.

Potential risks cited by H.C. Wainwright also include possible shareholder dilution, equipment shortages in mining, and regulatory scrutiny. Nonetheless, forecasted revenues from high-performance computing operations may help mitigate the company’s sensitivity to bitcoin price fluctuations going forward.

For further details, see the original article at CoinDesk.

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