🖼 📉 CoreWeave, backed by Nvidia, reduces IPO size and pricing due to investor concerns. According to people familiar with the matter, CoreWeave, a cloud service provider backed by Nvidia, plans to scale back its US initial public offering...

📉 CoreWeave, backed by Nvidia, scales back IPO size and pricing due to investor concerns

According to people familiar with the matter, CoreWeave, a cloud service provider backed by Nvidia, plans to reduce the size of its US initial public offering (IPO) and lower the offering price. The company now plans to sell 37.5 million shares at $40 per share, a 23.5% reduction from the original plan, and the offering price is also below the lower end of the previous guidance range of $47 - $55. After this adjustment, the IPO is expected to raise about $1.5 billion, and the company's fully diluted valuation is approximately $23 billion, lower than the initial target of up to $32 billion. Nvidia will place an order of $250 million as an anchor investment for this IPO.

This scaling back reflects the lukewarm response from investors during the roadshow. Main concerns include CoreWeave's heavy reliance on Microsoft, the sustainability of its capital-intensive business model, high debt (about $8 billion as of last year), and the company's lack of profitability. The market generally regards CoreWeave's IPO as an important test of confidence in the artificial intelligence market and the strength of the recovery of the US IPO market. Although CoreWeave has established partnerships with major AI companies such as OpenAI (including a $11.9 billion infrastructure agreement), investors' cautious attitude may indicate a recalibration of the valuation of AI infrastructure.

(Reuters)

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