When event-driven trades meet borrow stress, S3 exposes the pressure point.

All-Stock Upside: CoreWeave is acquiring Core Scientific in an all-stock deal (0.1235 CRWV per CORZ share), implying a ~66% premium at announcement. But CRWV’s limited float and high borrow cost distort the merger arbitrage trade, making the spread highly sensitive to forward pricing and the timing of the share unlock.

Share Unlock Trade: Pre-IPO CRWV shares are expected to unlock in late September. The post-earnings rally in May made shorting into the unlock an attractive trade, but limited borrow availability has driven borrow costs sharply higher. An early-unlock clause tied to the timing of the firm’s second earnings report could move that timeline up to August.

CRWV Borrow Cost: With CRWV borrow fees near 175% annualized, short sellers face ~36% in borrow costs through the expected 180-day unlock, assuming September 23rd unlock date. To profit under those assumptions, CRWV would need to fall below $88.50.

Options Market Signal: October options imply a forward CRWV price of $108 — a 22% discount to spot — signaling expectations for both share price moderation and easing borrow pressure. The higher forward price relative to the short-seller breakeven suggests the options market expects either a decline in borrow costs or an accelerated unlock.

Post-Unlock Proxy: CORZ shares fell 18% on July 7th following the merger announcement, reflecting their emerging role as a proxy for post-unlock CRWV. The current ~30% discount to the offer value breaks down into two parts: an estimated 22% discount implied by CRWV’s forward price (via options) and an estimated 8% discount for deal closure risk.

Deal Spread & Borrow Cost: As the deal spread narrows, CORZ is increasingly trading as a proxy for CRWV’s post-unlock float. This shift has pushed CORZ borrow costs modestly above general collateral, though they remain low relative to CRWV. If the deal is seen as highly likely to close, CORZ effectively expands access to CRWV exposure ahead of the share unlock — and deal-adjusted pricing and borrow costs between the two are likely to converge.

S3 Advantage: For the most timely, accurate data on CRWV short interest, borrow cost, and crowding contact S3. We flagged CRWV squeeze risk, on June 11 — days before a 22% move.

Want to know more? Access this data in real time using S3’s BLACK APP

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.