Some Core Scientific investors disappointed by all-stock deal, says Jefferies

After CoreWeave (CRWV) announced an agreement to acquire Core Scientific (CORZ) in an all-stock transaction, Jefferies notes that Core Scientific’s share price fell following the acquisition announcement, which the firm attributes to some investors being disappointed by the all-stock deal and the absence of a collar or a cash component to protect against CoreWeave’s volatile stock price. The firm argues that the selloff reflects the risk that CoreWeave’s stock price may be below a $130-$185 range by Q4, which it notes is a view that Jefferies does not share. The firm, which adds that it thinks the deals is a positive outcome for Core Scientific shareholders, assuming that CoreWeave shares “hang on at these levels,” has Buy ratings on both stocks with a $16 price target on Core Scientific and $180 price target on CoreWeave.