Glass Lewis and ISS Both Oppose CoreWeave-Core Scientific Merger, Citing Inadequate Deal Terms and Shareholder Risk
Proxy Advisors Highlight Concerns Over Merger Structure and Valuation
CoreWeave's proposed acquisition of Core Scientific is facing mounting opposition, with both Glass Lewis and ISS—the two most influential independent proxy advisory firms—urging Core Scientific shareholders to vote against the deal ahead of the October 30 special meeting. The joint stance amplifies scrutiny of the merger's structure, valuation, and the strategic risks for shareholders.
Key Findings: Deal Lacks Downside Protection and Fair Value for Shareholders
According to Glass Lewis, the market’s consistent discounting of the deal’s implied value and the absence of mechanisms to protect shareholders from CoreWeave's share volatility are significant red flags. Their report points to the lack of a price protection mechanism (like a collar or floating exchange ratio), which would have shielded Core Scientific investors from swings in CoreWeave's stock after the merger announcement. Instead, the all-stock structure leaves them exposed to uncertain outcomes.
| Merger Component | Key Observation |
|---|---|
| Structure | Fixed stock exchange with no collar or floating mechanism |
| Valuation | Implied merger value ($14.78 - $16.58 per Core Scientific share) persistently below Core Scientific market price and most valuation benchmarks |
| Market Spread | Implied merger consideration was 1%–21% lower than Core Scientific's standalone market value between August 14 and October 17, 2025 (avg. daily spread -11.4%) |
| Downside Protection | None included; leaves shareholders exposed to volatility |
Shareholder Value and Market Skepticism Weigh Heavily
Glass Lewis' analysis reveals that CoreWeave’s share price volatility—without a deal structure to mitigate risk—effectively transferred uncertainty to Core Scientific investors. In fact, for 68 out of 74 trading days following the announcement, the merger’s implied value was below the midpoint of financial advisors’ discounted cash flow (DCF) estimates. Notably, investors consistently valued Core Scientific more highly as a standalone entity.
Standalone Potential for Core Scientific Seen as More Compelling
Both proxy firms point to robust trends in the AI and high-performance computing infrastructure market as reasons Core Scientific could outperform on its own. Glass Lewis emphasized the market’s “persistent negative spread” between Core Scientific’s market value and the implied merger consideration, interpreting this as a lack of confidence in the deal. The potential for greater long-term value—particularly from its Colocation Contracted Business, which financial advisors may have undervalued—remains a critical argument for rejection.
| Assessment | Summary |
|---|---|
| Standalone Upside | AI/HPC market demand and asset value may yield higher returns for Core Scientific shareholders over time |
| Deal Structure | No protection against downside volatility, amplifying investor risk |
| Valuation Gap | Implied merger value persistently trails Core Scientific's trading price, reflecting market skepticism |
Takeaway: Unanswered Questions on Fairness and Shareholder Benefit
The back-to-back negative recommendations from Glass Lewis and ISS place the proposed CoreWeave-Core Scientific merger in doubt. Their assessments center on shareholder risk, a structure that overlooks market volatility, and doubts over whether the deal provides a fair return. With the special meeting fast approaching, shareholders now face a critical choice: accept an all-stock offer that leaves risk unhedged, or bet on Core Scientific's potential as an independent player in a growing sector. The outcome could serve as a broader lesson on deal structuring and investor protections in future tech M&A activity.
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