The Scoop
CoreWeave is planning to downsize its IPO and cut the share price, people familiar with the matter said, a bad sign for a listing seen as a test of whether AI startups are ready for the public markets.
The cloud computing company will seek a valuation closer to the $23 billion valuation it had in the private market a year ago than the roughly $30 billion it originally targeted, people familiar with the matter said. It will also slash the amount it plans to raise in half, to $1.5 billion.
Shares are expected to be allocated to investors Thursday night and the stock would start trading Friday. Sentiment could rally during today’s market session, changing the company’s calculus.
Questions have swirled about CoreWeave’s reliance on Microsoft, which buys the vast majority of its AI capacity.
A tough market backdrop is likely a factor, too. Tech stocks have lagged other sectors, a reversal and sign that investors aren’t buying rosy growth stories. Hedge funds, the usual buyers of IPOs, have been absolutely pummeled this year and could take any whiff of concern as a reason to sit this deal out.
CoreWeave’s public-market debut isn’t just a closely watched bellwether for AI, but for the IPO market overall, which has been in a deep freeze.