Two Seas Capital LP progresses with battle against deal
Core Scientific's largest shareholder - Two Seas Capital - is progressing with its efforts to oppose the company's acquisition by CoreWeave.
Having previously released a statement against the planned acquisition in August 2025, Two Seas Capital has now filed a proxy statement to the Securities and Exchange Commission (SEC) detailing its stance.
Core Scientific and CoreWeave agreed to an acquisition proposal on July 7, which would see AI cloud firm CoreWeave acquiring Core Scientific and its 1.3GW of data center capacity for $9bn 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. Upon close, CoreWeave expects Core Scientific’s stockholders’ ownership of the combined company will be less than 10 percent.
In the SEC filing, Two Seas states that it is "soliciting proxies" from other Core Scientific stockholders who are against the merger, and recommends that they "carefully consider the information" within the statement, and either sign the proxy card or vote against the merger at the Special Meeting that has been organized by Core Scientific's Board of Directors.
Two Seas currently holds shares representing around 6.3 percent of Core Scientific, making it one of the company's largest shareholders.
In the filing, Two Seas writes: "We invested in Core Scientific because we believe strongly in the company’s opportunity to create substantial long-term value for stockholders. The rapid proliferation of artificial intelligence and the applications that underpin AI have created an unprecedented, “insatiable” demand for compute power.
"We believe Core Scientific, with its first-mover advantage among digital asset mining companies and ready access to low-cost power at scale, is well positioned to become the market leader in designing, building, and operating digital infrastructure for high-performance computing."
The company goes on to state that it is "disappointed" in the decision to sell in what they regard as a "flawed process, at a valuation we believe is inadequate, and in a transaction that – as demonstrated by the significant decline in the implied value of the Merger post-announcement – was poorly structured."
Two Seas added: "In our view, the implied value of the consideration represents less than the fair value of the business and, remarkably, substantially less than where Core Scientific’s stock is trading today. We see no reason why any investor would support such a transaction."
The filing notes that CoreWeave's previous June 2024 proposal to acquire Core Scientific, while then only offering $1bn, was offering an 18 percent premium to the closing price of Core Scientific stock that day, while the latest proposal has a premium of just six percent.
It added that the latest proposal was considered for only one month before being accepted. "The process was short, in part, because the Core Scientific Board seemingly concluded early on, and with no apparent market analysis, that CoreWeave was the only worthy counterparty."
Two Seas said that the board justified this by "claiming" that no other party was interested in buying Core Scientific. "Notably, neither the Board nor the Company’s financial advisors, who had been retained for less than two weeks at that point, offer any evidence for such a pivotal conclusion beyond the fact that no one had expressed an interest in the year since the June 2024 Unsolicited Proposal."
Another complaint made by Two Seas is that CoreWeave's stock - which is being offered to Core Scientific shareholders under the transaction terms - is "unusually susceptible to a material decline in value" and would leave stockholders exposed. Additionally, at the time of the merger, CoreWeave was one of the most "heavily shorted companies" listed on Nasdaq.
Finally, Two Seas fundamentally feels that the deal undervalues Core Scientific, even at the proposed $20.40 per share. Since then, Core Scientific's stock value has dipped, as has CoreWeave's. At the time of filing the proxy, Two Seas said that the value of the merger is now lower than Core Scientific's current stock price, describing the deal as a "take under."
Two Seas theorizes that Core Scientific's decision to move ahead with the sale is the potential "impressive economics that the Core Scientific management team will receive if this deal closes."
The investor says that it would not be against a sale to CoreWeave should it be at the right price and structure.
DCD has reached out to both CoreWeave and Core Scientific for comment.
Source: DCD
