Oaktree’s New $115 Million Core Scientific Bet Tested as Stock Plunges Amid Merger Turmoil

Oaktree Capital Management disclosed a new position in Core Scientific (NASDAQ:CORZ), acquiring 6.4 million shares valued at approximately $114.8 million in the third quarter, according to an SEC filing released on Thursday.

What Happened

According to a filing with the Securities and Exchange Commission released Thursday, Oaktree Capital Management initiated a new position in Core Scientific (NASDAQ:CORZ) during the third quarter. The fund purchased 6.4 million shares for an estimated $114.8 million as of September 30. The addition brought Oaktree’s total number of 13F reportable positions to 62.

What Else to Know

Top holdings after the filing:

• NASDAQ:TRMD: $834.6 million (17.6% of AUM)
• NASDAQ:EXE: $537.8 million (11.3% of AUM)
• NASDAQ:GTX: $434.4 million (9.2% of AUM)
• NYSE:AU: $294.3 million (6.2% of AUM)
• NASDAQ:VNOM: $240.2 million (3.7% of AUM)

As of Thursday, shares of Core Scientific were priced at $15.16, down 6% over the past year and underperforming the S&P 500, which has climbed nearly 15%.

Company Overview

Company Snapshot

• Core Scientific, Inc. provides digital asset mining, blockchain infrastructure, and colocation hosting services, generating revenue from both proprietary mining and third-party hosting contracts.
• The company operates by owning and managing datacenter facilities and computer equipment to process blockchain transactions, earning transaction fees and hosting fees from institutional clients.
• Primary customers include large-scale digital asset miners and enterprises seeking secure, high-performance blockchain infrastructure solutions in North America.

Core Scientific, Inc. is a leading provider of blockchain infrastructure and digital asset mining services, with a significant presence in the North American market. The company leverages proprietary technology and large-scale datacenter operations to deliver efficient transaction processing and hosting for institutional clients.

With a dual revenue model from both self-mining and hosting services, Core Scientific aims to capitalize on the growing demand for secure, scalable blockchain infrastructure. Its competitive edge lies in operational scale, technical expertise, and a diversified client base within the digital asset ecosystem.

Foolish Take

Oaktree Capital Management’s $115 million bet on Core Scientific signals a vote of confidence in the crypto-miner, but came just before the stock’s sharp 34% tumble since early November amid a failed proposed merger with CoreWeave. The third-quarter filing shows Oaktree acquired 6.4 million shares, making Core Scientific one of its larger new positions.

Core Scientific's October 24 earnings release reported $81.1 million in quarterly revenue, down from $95.4 million one year earlier. While the firm narrowed its net loss to $146.7 million from $455.3 million the prior year, margins remained tight, and adjusted EBITDA turned negative. On October 30, Core Scientific announced it failed to get the votes required to move forward with a proposed merger with CoreWeave, and earlier this month, CoreWeave’s CEO dodged questions about data center delays linked to Core Scientific, which triggered a 10% drop in Core’s shares as investors questioned its execution capacity.

Oaktree’s move fits its opportunistic energy and infrastructure strategy—alongside large positions in Viper Energy and AngloGold Ashanti—but the timing highlights the stock's broad volatility. Long-term investors will want to see whether Core Scientific can stabilize operations and move past the failed merger before reassessing its growth narrative.

Glossary

13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC, showing their equity holdings.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Position: The amount of a particular security or asset held by an investor or fund.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Colocation hosting: A service where businesses rent space in a third-party datacenter to house their computer servers and equipment.
Digital asset mining: The process of using computer hardware to validate and record transactions on a blockchain, earning rewards in digital assets.
Blockchain infrastructure: The hardware, software, and facilities needed to support and operate blockchain networks and applications.
Proprietary mining: When a company mines digital assets for its own account, rather than on behalf of clients.
Hosting contracts: Agreements where a company provides space, power, and maintenance for clients’ computing equipment.
Institutional clients: Large organizations such as investment funds, banks, or corporations that invest or use services at scale.
Market value: The current total value of a security or portfolio based on prevailing market prices.
Datacenter facilities: Specialized buildings equipped to house and operate large numbers of computer servers and networking equipment.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Garrett Motion and Viper Energy. The Motley Fool has a disclosure policy.