A Whimsical $116 Million Gamble on Core Scientific Amidst Bitcoin’s Tumultuous Waves

In the sunlit boulevards of San Francisco, the ever-astute chaps at Valiant Capital Management have taken it upon themselves to bolster their holdings in the ever-intriguing Core Scientific (CORZ 0.07%). Having acquired an additional 1.68 million shares during the third quarter-a rather hefty investment amounting to around $34.34 million-their confidence appears buoyant, as evidenced by a filing with the Securities and Exchange Commission dated November 14. Quite the audacious leap, what?

What Happened

As the tale unfolds-according to that same SEC missive-Valiant Capital has now amassed a grand total of 6.48 million shares of our dear friend Core Scientific, culminating in a market value of $116.31 million as of the 30th of September. To add a sprinkle of intrigue, the fund has also secured call options tied to approximately 4.21 million shares; one can only assume they have their eyes firmly set on the future.

What Else to Know

The crème de la crème of holdings post filing include:

NASDAQ:CORZ: $116.31 million (10.8% of AUM)
NYSEMKT:SPY: $102.93 million (9.5% of AUM)
NYSEMKT:IWM: $102.31 million (9.5% of AUM)
NYSE:AGX: $68.75 million (6.4% of AUM)
NYSE:GEV: $67.16 million (6.2% of AUM)

As of Wednesday-oh, the wonders of stock prices-CORZ shares were prancing about at $14.65, which, one might say, is a modest 4% increase over the past year. However, this seems somewhat lackluster when juxtaposed against the S&P 500’s sprightly 17% rise during the same span. A touch of envy, if you will!

Company Overview

Metric	Value
Market Capitalization	$4.54 billion
Employees	325
Revenue (TTM)	$334.18 million
Net Income (TTM)	($768.31 million)

Company Snapshot

Core Scientific, in its infinite wisdom, dabbles in digital asset mining, blockchain infrastructure, and colocation services, all while generating revenue from self-mining operations and providing hosting solutions for those industrious miners who require a helping hand.
The company’s dual business model-how splendidly clever!-allows it to earn income both by mining digital assets for its own account and from hosting and equipment sales to third-party miners, who sometimes resemble lost sheep seeking shelter.
Its primary clientele? Why, they are none other than the large-scale digital asset miners and blockchain technology firms in quest of secure and high-performance infrastructure and hosting services.

Our dear Core Scientific, Inc. stands tall as a leading purveyor of blockchain infrastructure and digital asset mining services across North America, operating vast data centers and offering both self-mining and hosting solutions, much to the delight or dismay of its stakeholders, depending on the day.

Foolish Take

Now, it’s imperative to note that this stake was amassed while Core Scientific was galloping ahead with remarkable fervor, rather than during a period of catastrophic misfortune. To be precise, shares had soared about 24% in the first three quarters of the year, buoyed by a wave of optimism surrounding infrastructure monetization and the proposed CoreWeave merger. Alas, the subsequent 32% plunge came after the unfortunate demise of that deal in late October, which left investors scratching their heads in confusion.

This sequence of events lends a rather different hue to the narrative. It was not merely a case of opportunistic buying amidst a dip; rather, it signals a robust endorsement of a strategy prior to the return of headline risk, which tends to pop up like an unwelcome guest at a garden party.

At the time, Core Scientific began to be assessed less as a mere Bitcoin miner and more as a veritable power and compute platform-a shift that was reinforced by their third-quarter results, which highlighted an uptick in colocation revenue and the delightful optionality nestled within their bounteous, power-rich data center domain. Though the collapse of the merger may have snuffed out a near-term catalyst, it has not extinguished the underlying thesis.

Within the portfolio, this remains the most concentrated position, surpassing even broad market ETFs and industrial holdings, which suggests a willingness to embrace volatility in exchange for the tantalizing potential of a nonlinear payoff. A bit of a gamble, wouldn’t you say?

Glossary

13F reportable assets under management: The portion of a fund’s assets required to be disclosed in quarterly SEC Form 13F filings.
AUM (Assets Under Management): The total market value of investments managed by a fund or investment firm.
Colocation services: Renting space and infrastructure in a data center to host clients’ computing equipment.
Digital asset mining: The process of using computing power to validate blockchain transactions and earn cryptocurrency rewards.
Hosting solutions: Services that provide infrastructure and management for clients’ computing or mining equipment.
Self-mining operations: When a company mines digital assets for its own account rather than on behalf of clients.
Dual business model: A company strategy that generates revenue from two distinct but related business activities.
Quarter: A three-month period used by companies to report financial performance, often aligning with calendar quarters.
Market value: The total value of a holding, calculated as the current share price multiplied by the number of shares owned.
TTM: The 12-month period ending with the most recent quarterly report.
Colocation: The practice of housing privately-owned servers and networking equipment in a third-party data center.

So there we have it, a splendidly convoluted affair in the world of finance, where fortunes may rise and fall like a well-timed soufflé. 🥳

2025-12-31 20:43