Fund Adds $25 Million to Core Scientific Stake Weeks Before a Nearly 40% Selloff
Key Points
New York City-based DSC Meridian Capital added nearly 1.4 million shares of Core Scientific in the third quarter.
The net position change from the previous period was about $25.4 million.
As of September 30, the fund reported holding nearly 2.3 million Core Scientific shares valued at about $40.9 million, making it the fund's second-largest position.
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New York City-based DSC Meridian Capital disclosed a substantial buy of Core Scientific (NASDAQ:CORZ) in a November 14 SEC filing, a move that contributed to an increase in its position by $25.4 million.
What Happened
According to an SEC filing on November 14, DSC Meridian Capital increased its stake in Core Scientific (NASDAQ:CORZ) by nearly 1.4 million shares, bringing its holdings to 2.3 million shares. The position’s value at quarter-end was approximately $40.9 million, up from the previous period. The fund reported 11 equity positions totaling about $493 million in assets under management as of September 30.
What Else to Know
Core Scientific stake now represents 8.3% of 13F AUM.
Top holdings after the filing:
- NYSEMKT: BKLN: $43.8 million (21.9% of AUM)
- NASDAQ: CORZ: $40.9 million (20.5% of AUM)
- NYSE: VST: $26.3 million (13.2% of AUM)
- NASDAQ: COOP: $22.9 million (11.5% of AUM)
- NYSE: TECK: $22.9 million (11.4% of AUM)
As of Wednesday, Core Scientific shares were priced at $13.57, down 15% over the past year and well underperforming the S&P 500, which is up 12% in the same year.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Wednesday) | $13.57 |
| Market capitalization | $4.2 billion |
| Revenue (TTM) | $334.2 million |
| Net income (TTM) | ($768.3 million) |
Company Snapshot
- Core Scientific operates digital asset mining facilities and provides blockchain infrastructure, software solutions, and colocation services in North America.
- The company generates revenue through mining digital assets for its own account and by offering hosting and equipment sales to third-party miners, leveraging large-scale data-center operations.
- Its primary customers include institutional digital asset miners and enterprises requiring blockchain infrastructure and hosting services.
Core Scientific operates facilities for digital asset mining and provides blockchain infrastructure and digital asset mining services in North America. The company combines proprietary mining operations with large-scale hosting and colocation offerings, targeting institutional clients and enterprises in the blockchain ecosystem.
Foolish Take
The bulk of this position was built before Core Scientific’s sharp roughly 40% decline since late October, which is when the firm’s shareholders voted to terminate an acquisition of CoreWeave. This timing is important because it signals that this wasn't a dip-buy after the drop but a bet that was subsequently tested by the market.
As evidence, Core Scientific’s third-quarter results point to a business that is stabilizing operationally even as sentiment has swung sharply. Revenue declined year over year to $81.1 million, but the mix continues to improve. High-density colocation revenue climbed to $15 million from $10.3 million a year earlier, reinforcing the company’s strategic pivot toward infrastructure tied to AI and advanced compute rather than pure crypto exposure. Gross profit turned positive at $3.9 million, a meaningful shift from losses in the prior-year quarter, while net losses narrowed despite continued capital investment. Liquidity remains a central pillar of the long-term thesis. Core Scientific exited the quarter with roughly $695 million in liquidity, including cash and bitcoin holdings.
Meanwhile, analysts have been turning more positive in recenet week, with Macquarie, Clear Street, and Cantor Fitzgerald among those raising their rice targets or issuing more positive ratings.
Glossary
13F: A quarterly SEC filing required from institutional investment managers to disclose their equity holdings.
Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
Net position change: The difference in the number or value of shares held by an investor after a transaction.
Reportable assets: Assets that must be disclosed in regulatory filings, such as those listed in a 13F report.
Colocation services: Renting space and resources in a data center for clients to house their own computing equipment.
Digital asset mining: The process of using computing power to validate blockchain transactions and earn digital assets as rewards.
Blockchain infrastructure: The hardware, software, and systems supporting the operation and security of blockchain networks.
Institutional investor: An organization, such as a fund or pension, that invests large sums of money in securities and assets.
Quarter-end: The last day of a financial quarter, used as a reference point for reporting and valuation.
Proprietary mining: Mining digital assets for the company's own account, rather than on behalf of clients.
Hosting (in mining): Providing facilities and services for third parties to operate their mining equipment.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Teck Resources. The Motley Fool has a disclosure policy.
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