In a recent disclosure filed with the Securities and Exchange Commission dated November 13, PSquared Asset Management AG, a Zurich-based investment firm, revealed the establishment of a new position in Core Scientific, a notable player in the digital asset mining and blockchain infrastructure sector. During the third quarter, PSquared acquired 405,800 shares, resulting in a holding valued at approximately $7.28 million. This stake represented 5.78% of the firm's total $125.97 million U.S. equity assets under management, marking a significant new entry into the firm's portfolio as Core Scientific had not been present in previous quarterly filings.
PSquared's overall portfolio allocation post-disclosure highlights several dominant holdings in addition to its Core Scientific position. The firm’s largest equity exposures include: $42.77 million invested in NYSE-listed Kellogg Company, constituting 34% of assets under management; $25.04 million in Solstar Solar (NYSEMKT:SLSR) representing 19.9%; $18.99 million in Teck Resources (NYSE:TECK) at 15.1%; $11.34 million in TaskUs Inc. (NASDAQ:TASK) contributing 9%; and $8.42 million in Hologic (NASDAQ:HOLX), comprising 6.7% of the investment portfolio.
Core Scientific shares were last reported at $15.29 per share, reflecting a 5.5% appreciation over the prior 12 months. However, this gain notably underperformed the broader S&P 500 index, which appreciated approximately 15% within the same timeframe. The company’s market capitalization stands at $4.74 billion, with trailing twelve months (TTM) revenues of $334.18 million. Despite substantial revenues, Core Scientific recorded a net loss of $768.31 million, indicating ongoing financial challenges within the current operational structure.
Operating primarily in the digital asset mining and blockchain infrastructure domain, Core Scientific engages in a dual business framework. The company not only mines digital assets utilizing proprietary capabilities but also provides colocation and hosting services tailored for institutional-scale blockchain clients. These clients typically comprise large blockchain miners and enterprises requiring secure, high-performance infrastructure to support distributed ledger technologies. Core Scientific’s datacenter facilities span North America, and its service offerings include both mining digital assets for its own account and hosting third-party blockchain operations in secure environments.
The disclosed investment by PSquared coincided with a period when Core Scientific's business developments were perceived as promising within the context of the digital infrastructure segment. At quarter-end, the company benefited from expanding hosting contracts, reflecting a broadening of its service revenue streams. Additionally, the company had recently emerged from restructuring efforts, leading to improved balance sheet metrics.
Investors had also anticipated a merger with CoreWeave as a strategic move to monetize Core Scientific’s energy-intensive data center assets, providing a clear catalyst for value realization. This merger was expected to streamline operations and enable new growth trajectories aligned with high-density colocation and AI-focused workloads.
However, the optimism surrounding Core Scientific experienced a setback in late October when the company formally terminated the proposed merger agreement with CoreWeave. This termination resulted from a failure to secure necessary shareholder approval, removing a critical planned milestone from the company’s growth strategy.
This development precipitated nearly a 30% decline in Core Scientific’s stock price, reflecting market concerns over the loss of a tangible catalyst and uncertainty about the company's ability to pivot quickly and effectively toward high-density colocation services and AI-adjacent workloads without the merger’s support. Operationally, Core Scientific continues to maintain control over valuable power infrastructure and to transition its capacity away from a sole focus on bitcoin mining towards diversified hosting and compute service offerings.
Despite the merger withdrawal, the company has yet to experience significant operational changes overnight. The primary challenge now centers on execution risk as the market reevaluates Core Scientific’s ability to realize sustained growth independently. The shift in investor sentiment underscores the importance of strategic clarity and operational execution in the rapidly evolving digital asset infrastructure sector.
Key Terminologies:
- 13F Assets: U.S. equity holdings that institutional investment managers are mandated to report quarterly to the SEC.
- Assets Under Management (AUM): The aggregate market value of investments managed on behalf of clients by a financial institution.
- Position: The quantity or value of a specific security or asset held by an investor or fund.
- Colocation Hosting: The service of providing space, power, and security for client-owned computing hardware hosted in a third-party data center.
- Proprietary Mining: Mining digital currencies using company-owned resources for its own account, rather than on behalf of clients or third parties.
- Trailing Twelve Months (TTM): The period covering the last twelve consecutive months of financial data.
- Distributed Ledger: A database that is consensually shared and synchronized across multiple locations and participants.
- Institutional-Scale: Services or operations structured to meet the requirements of large organizations rather than individual consumers.
- Datacenter: Facilities equipped to house computer systems and associated components for data processing and storage.