Bitcoin miner Core Scientific declines $1b buyout offer

Core Scientific Inc., a major player in the Bitcoin (BTC) mining industry, has rejected an unsolicited $1 billion takeover offer from artificial intelligence (AI) startup CoreWeave Inc., as more companies try to jump on the crypto bandwagon.

Core Scientific rejects takeover offer

Core Scientific, one of North America’s largest owners and operators of high-powered digital infrastructure for Bitcoin mining and hosting services, has made an unsolicited, non-binding offer to acquire all of its outstanding shares from CoreWeave for $5.75 per share on a fully diluted basis. took. advance.

The offer, which valued Core Scientific at $5.75 per share, was made on March 28, 2023, and was rejected by the company’s board of directors.

This offer comes shortly after Core Scientific and CoreWeave signed a series of 12-year contracts to provide approximately 200 MW of infrastructure for Core Scientific to host CoreWeave’s high-performance computing services.

Despite the potential benefits of the partnership, Core Scientific’s board of directors determined that the offer significantly reduced the value of the company and was not in the best interest of the company and its shareholders. The Board cited Core Scientific’s significant growth potential and ability to capitalize on growing demand for data center space and high-performance computing facilities.

This decision comes after Core Scientific emerged from bankruptcy protection in January. Following the announcement, the company’s shares rose as much as 16% to $8.30 on June 6 and are up nearly 70% since the initial purchase offer.

Core Scientific’s $3.5 billion deal with CoreWeave

In other news, Core Scientific recently signed a landmark 12-year agreement with CoreWeave, a cloud computing provider, to provide 200 megawatts (MW) of infrastructure to host CoreWeave’s high-performance computing (HPC) operations.

This partnership represents a milestone in Core Scientific’s strategy to diversify its business model and capitalize on the growing demand for data center space and high-performance computing facilities.

The $3.5 billion deal is expected to generate cumulative revenue in excess of $3.5 billion over the first 12-year contract periods.

The estimated average annual revenue from these contracts is approximately $290 million. This revenue stream will allow Core Scientific to balance its portfolio between Bitcoin mining and alternative computer hosting, positioning the company to optimize cash flow and mitigate risks while gaining significant exposure to Bitcoin’s potential growth.

Approximately 18% of Core Scientific’s total operating infrastructure will be used to accommodate CoreWeave’s HPC operations.

More companies are getting into crypto

Bakkt, the digital asset platform launched by Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), is reportedly exploring a potential sale.

The company has retained a financial advisor to evaluate various strategic options, including a possible sale or separation.

This news coincides with fintech brokerage firm Robinhood’s announcement that it has acquired European crypto exchange Bitstamp for $200 million. The move reflects a broader trend of larger firms acquiring crypto-related companies as the industry consolidates.

Bakkt, which went public through a blank check vehicle merger in 2021, is evaluating its strategic alternatives under the guidance of a financial advisor.

Shares of Bakkt rose 15% to $22.33 on June 7, despite reporting a loss of $21 million on revenue of $855 million in the first quarter. Its market value is around 300 million dollars.

The potential sale or breakup of Bakkt highlights the ongoing consolidation in the crypto industry as larger firms aim to strengthen their presence in the digital asset space. With Bakkt holding a BitLicense from the New York State Department of Financial Services and partnerships with companies like Starbucks and Microsoft, the platform could emerge as an attractive acquisition target for firms looking to enter or expand the crypto market.

As Web3 market participants continue to predict a massive crypto summer to come, it certainly won’t be a surprise to see more established firms stepping into the fledgling crypto world.