Two Seas Capital: $200M at Stake Explains Core Scientific’s Support for Flawed CoreWeave Merger

Two Seas Capital, one of Core Scientific’s largest shareholders, said the company’s executives stand to reap nearly $200 million if the proposed merger with CoreWeave goes through—an incentive it argues explains management’s support for a deal that is, in its view, both flawed and undervalued.

In a Sept. 4 proxy filing, the investment firm said performance share units for Core Scientific executives will vest at maximum levels immediately upon closing, even if they remain employed by CoreWeave.

Two Seas noted that Core Scientific had promoted its performance equity program as a “double-trigger” plan—vesting only with both a change in control and a qualifying termination—to align executives with shareholder interests.

“Instead, the awards will vest immediately upon closing, providing executives an immediate and certain windfall,” the filing stated, adding: “All told, the Company’s executive officers named in the Company’s Proxy Statement stand to reap nearly $200 million in compensation payable in connection with the Merger.”

Two Seas Capital, which owns 6.3% of Core Scientific, reiterated its opposition to the merger, criticizing the board for rushing into exclusive talks with CoreWeave, failing to solicit alternative bids, and accepting a transaction structure that leaves shareholders exposed to CoreWeave’s volatile stock.

Since the deal’s July announcement, CoreWeave shares have dropped more than 40%, cutting the implied offer value to below $12 per Core Scientific share—less than both its current trading price and valuations outlined by its advisers.

Two Seas also pointed to restrictive terms like a no-shop clause and breakup fee, which it said discouraged rival offers, and highlighted CoreWeave’s high volatility, short interest, and lock-up expirations that fueled further stock declines.

While Core Scientific has pitched the merger as a path to strengthen its role in AI and high-performance computing, Two Seas argued that shareholders would be better served by allowing the company to continue independently, citing its $10.2 billion CoreWeave hosting contract, scale, and access to low-cost power.

A special shareholder meeting will be held to vote on the merger, with a date yet to be announced.