Investment bank Jefferies said Core Scientific (CORZ) shareholders appear set to reject the proposed merger with CoreWeave (CRWV) when they vote on October 30, as CORZ shares are trading about 18% above the implied offer price.
The premium suggests investors view the deal as undervaluing Core Scientific, and unless CoreWeave shares rise sharply, Jefferies doesn’t expect any results, the bank said in a report Tuesday.
Proxy advisor ISS and major shareholder Two Seas Capital have urged investors to reject the deal, citing valuation concerns and structural flaws.
Core Scientific’s valuation remains complex. Adjusted for land banks and bitcoins mining operations, CORZ trades roughly in line with Applied Digital (APLD), well below Cipher Mining (CIFR) and above TeraWulf (WULF), showing mixed signals on whether it is cheap or fully valued, analysts Jonathan Petersen and Jan Aygul wrote.
Analysts argued that even if the deal falls through, Core Scientific is well positioned to create value on its own. With 305 megawatts (MW) of billable IT load available, the company could lease capacity to CoreWeave or attract a new hyperscale or “neocloud” tenant, validating its pivot to high-performance computing.
Additional leases, energy expansion or new site acquisitions could lift its valuation, and Jefferies said a future transition to a REIT model could generate greater upside.
Still, the report warned that a failed vote could complicate Core Scientific’s relationship with CoreWeave, potentially making new tenants hesitant to commit. However, growing demand for CoreWeave GPU capacity could still bring companies back to the table.
Reflecting his confidence in Core Scientific’s standalone prospects, the bank’s analyst raised his price target from $22 to $24.
Core Scientific shares rose 1.7% in early trading, around $20.44.
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