Cloud infrastructure provider CoreWeave Inc (NASDAQ:CRWV) is in renewed discussions to acquire Bitcoin miner Core Scientific Inc., according to reports. Here’s why the stock has been volatile.
What To Know: This potential merger has drawn significant interest, with a Morgan Stanley forecast suggesting the deal could boost Core Scientific's market capitalization by an impressive $2.8 billion.
This new takeover attempt, reported by the Wall Street Journal, could see a deal finalized within weeks. The development comes about a year after Core Scientific, now valued at approximately $4.87 billion, rejected a $5.75 per share offer from CoreWeave, which it deemed an undervaluation.
The two companies are already connected through a significant 12-year, $10 billion hosting partnership. Analysis shared by Eric Jackson of EMJ Capital highlights that Core Scientific reaps a highly favorable 75%-80% profit margin from this existing contract. This suggests potential profits of around $7.75 billion, a figure that eclipses Core Scientific's current market capitalization.
The acquisition talks underscore the intense demand for data center capacity and power, driven by the artificial intelligence sector. CoreWeave, a company valued at roughly $75.87 billion with major clients like Microsoft and Meta, is seeking to expand its infrastructure.
Price Action: CRWV shares are trading higher by 5.24% to $166.49 Friday afternoon. The stock has a 52-week high of $187.00 and a 52-week low of $33.52.
Read Also: CoreWeave IPO Was ‘Fantastic Entry Point,’ But Stock Now ‘A Little Overheated’
How To Buy CRWV Stock
By now you're likely curious about how to participate in the market for CoreWeave – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.
In the case of CoreWeave, which is trading at $165.01 as of publishing time, $100 would buy you 0.61 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
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