Coreweave (CRWV) shares opened lower on Tuesday, with analysts questioning whether the company’s recent acquisition of Core Scientific (CORZ) has made a meaningful contribution to its bottom line.
After the opening round, CRWV stock fell 3.6% to $153.97. Despite a decline, cryptocurrency miners have held a market capitalization of $75 billion since their initial public offering in March.
The announcement on Monday that the $9 billion full-sharing deal for Coreweave to acquire the full $9 billion deal for Core Scientific’s $9 billion deal was raised.
As Auxiliary device reportthe transaction provides core science shareholders with 0.1235 newly issued CoreWeave Class A common shares for their Corz shares.
“The purchase of Core Scientific won’t add any profit to CRWV,” Luria told CNBC’s Squawk Box. “What they did is make sure Colz doesn’t give its capabilities to others.”
Mizuho analysts cut Coreweave’s stock from “outperforming the market” to “neutral.” While they acknowledge the potential benefits of core science acquisitions, they say the risk-reward profile of CRWV now looks “balanced”, suggesting that the stock may have a breath after nearly 300% of the rally.
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CoreWeave acquires volatile mining operations
Stocks of crypto mining companies such as Core Scientific are highly volatile and often show widespread price volatility due to their reliance on the cryptocurrency market.
Core Scientific’s business is also closely related to Bitcoin (BTC) The four-year halving cycle is reflected in it First quarter earnings reportits core operations are both declining revenue and profitability.
While CoreWeave may inherit some volatility after the acquisition, it is unclear whether Core Scientific will retain its Bitcoin mining business.
Coreweave says in the acquisition announcement It sees “the potential to repurpose (the asset of core science) for HPC use or divest the crypto mining business in a medium-term perspective.”
HPC or high-performance computing and AI workloads are already increasingly focused before the acquisition.
Several other miners, including Honeycomb Numbersin the volatile cryptocurrency prices, similar hubs have been made to help protect income and income.
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