US EditionCoreWeave to cut size and value of IPO and add Nvidia as anchor investor
- CoreWeave, an Nvidia-backed cloud services provider, is scaling back its initial public offering and now plans to sell 37.5 million shares priced at $40 apiece, a figure well below the initial indicated range, and will begin trading on the Nasdaq Global Select Market today under the ticker symbol CRWV.
- The decision to reduce the IPO's size by 23.5% from the initially planned 49 million shares and lower the valuation from $32 billion to $23 billion comes amidst growing investor uncertainty in the AI marketplace and a weaker-than-expected reception during the roadshow, which began last week.
- Concerns contributing to the reduced IPO include CoreWeave's heavy reliance on a small number of customers, particularly Microsoft which accounted for 62% of revenues in 2024, as well as general financial risks and capital intensity given that CoreWeave has yet to turn a profit and had approximately $8 billion in debt last year.
- Nvidia, a major customer and partner, will anchor the CoreWeave IPO with a $250 million order at the reduced price, while CoreWeave also secured partnerships with major AI players like OpenAI, with whom they signed an $11.9 billion infrastructure deal earlier this month where the cloud services provider will issue $350 million in shares through a private placement.
- CoreWeave's performance on the Nasdaq is being closely watched as a test of investor enthusiasm for AI newcomers and the strength of recovery in the U.S. IPO market, where the number and total value of U.S.-listed equity capital markets deals fell in the first three months of this year, potentially influencing other startups' plans to go public and overall sentiment towards AI companies, as Lukas Muehlbauer, a research analyst at IPOX, stated that "this suggests investors are recalibrating AI infrastructure valuations.
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The CEO of CoreWeave explains why they went public—And why they scaled back their initial offer
Shares of CoreWeave, an AI cloud provider, started trading Friday following a much-anticipated IPO that is being seen as a litmus test for other AI companies hoping to go public. Originally founded as a crypto mining company, CoreWeave pivoted to renting out its Nvidia graphic processing units to companies desperate to train AI. The New Jersey-based company is the first tech listing this year, but its debut does not come without controversy. Wh…
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