Shares of Core Scientific, Inc. (CORZ) plummeted 18.64% in pre-market trading on Monday following the announcement that CoreWeave, Inc. (CRWV) plans to acquire the company in an all-stock transaction valued at approximately $9 billion. The sharp decline reflects investor reaction to the terms of the deal and potential concerns about the future of the combined entity.

Under the terms of the merger agreement, Core Scientific shareholders will receive 0.1235 newly issued shares of CoreWeave stock for each share of Core Scientific they hold. This exchange ratio implies a value of $20.40 per Core Scientific share, based on CoreWeave's closing price of $165.20 on July 3. While this represents a premium of nearly 66% to Core Scientific's closing price before potential deal talks were first reported, the market's reaction suggests that investors may have expected a more favorable deal or have concerns about the all-stock nature of the transaction.

The acquisition is expected to significantly expand CoreWeave's data center portfolio, adding approximately 1.3 gigawatts of gross power, with an additional gigawatt available for expansion. CoreWeave CEO Michael Intrator stated that the deal would accelerate the company's strategy to deploy AI and high-performance computing workloads at scale. However, the market's negative reaction may indicate skepticism about the synergies and long-term benefits of the merger. As the AI and crypto mining sectors continue to evolve rapidly, investors will be closely watching how this consolidation impacts both companies' competitive positions and financial performance.