Two Seas Capital, the third largest shareholder in Core Scientific ( CORZ ) with a 6.3% stake, has come out against the bitcoin miner’s proposed all-stock acquisition by AI cloud provider CoreWeave ( CRWV ) .

In a letter published Thursday, Two Seas said it intends to vote against the deal, which was announced July 7, and plans to rally other shareholders to do the same unless significant changes are made.

The opposition centers on the all-stock, uncollared nature of the transaction, which Two Seas argues unfairly favors CoreWeave ( CRWV ) and fails to reflect Core Scientific’s strategic position in high-performance computing (HPC) infrastructure.

"The proposed sale materially undervalues the company and unnecessarily exposes its shareholders to substantial economic risk," said Sina Toussi, founder of Two Seas.

CORZ is up modestly in Thursday trading at $14.24, substantially below what the roughly $20 the shares would have been worth at the time of the proposed acquisition four weeks ago.

Two Seas has backed CORZ since 2022, participating in its post-bankruptcy restructuring and financing rounds. The firm says it still believes in Core Scientific’s long-term value and prefers it remain independent if a better offer doesn’t emerge.

Despite also holding a stake in CoreWeave ( CRWV ) and supporting the idea of a combination, Two Seas called the current deal underwhelming and pointed to Core Scientific’s 30% stock drop after the deal announcement as evidence of investor concern.

Two Seas urged the board to pursue alternative bids, including from CoreWeave ( CRWV ), but only at terms that reflect the full strategic value of Core Scientific’s assets and growth prospects. The firm plans to release further analysis and engage with shareholders in the coming weeks.

Analysts at investment bank KBW predicted that Core Scientific ( CORZ ) shareholders may push back on the terms of the deal, given the unchanged asset base since CoreWeave's ( CRWV ) first failed bid and the lack of a cash component, in a report published last month.

Read more: CoreWeave's ( CRWV ) All-Stock Bid for Core Scientific Likely to Draw Shareholder Scrutiny: KBW