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.