CoreWeave CEO discusses IPO pricing: Positioned at a place where the market truly has buying interest
Despite strong support from NVIDIA and robust customer demand, AI cloud computing star CoreWeave will ultimately go public at a discounted price of $40 per share, below the expected range of $47 to $55, with a valuation shrinking to $19 billion. The CEO admitted that the current macro environment is fraught with headwinds, and the scale of the transaction must match genuine buying interest. Without NVIDIA as an anchor investor, we would not have been able to complete the IPO. This fundraising will primarily be used to repay debt and expand infrastructure, especially for deployment in the European market
"CoreWeave, the 'favorite child' of NVIDIA, officially listed on NASDAQ today with the stock code 'CRWV'.
Despite being backed by NVIDIA and having strong customer demand, CoreWeave's IPO was ultimately priced at $40 per share, lower than the previously expected range of $47 to $55 in the prospectus, with the total fundraising amount shrinking from the original plan of $2.7 billion to $1.5 billion, corresponding to a non-diluted valuation of approximately $19 billion.
On Friday, Eastern Time, the company's CEO Mike Intrator stated on CNBC that this pricing must be viewed in the context of a larger macro environment:
"The current macro environment has strong headwinds (market sentiment is conservative), and the company had to moderately adjust the transaction scale to match real buying demand."
"When the market truly understands our execution capability, customer relationships, and product capabilities, CoreWeave's value will gradually be recognized."
Insiders revealed that this lower pricing provides investors with a safety margin "close to asset reset value," giving them more confidence when purchasing. CoreWeave will sell half of the $1.5 billion IPO shares to three buyers. About 10 to 15 long-term and strategic investors participated in the subscription, forming the main investment group.
Earlier reports on Thursday indicated that NVIDIA also participated in this issuance as an anchor investor with a subscription scale of $250 million. CoreWeave's CEO stated:
"Without NVIDIA as an anchor investor, the company would not have been able to complete the IPO."
After the fundraising is completed, CoreWeave stated that the funds will primarily be used to repay debt and expand infrastructure, especially for deployment in the European market.
As of the end of 2024, the company's debt scale is nearly $8 billion, and it had previously experienced a "technical default" operationally due to a $7.6 billion loan. In response, the CEO stated that the company proactively disclosed this incident in the S-1 prospectus and quickly reached a settlement with the lender:
"Even after this incident, lenders continued to provide us with hundreds of millions of dollars in additional financing."
According to the Financial Times, the loan funds were early used for expansion in the European market, and the company is working to push its global data center network to a new stage.
Despite the conservative IPO pricing and heavy debt burden, CoreWeave's CEO is confident about the company's prospects.
He stated that the demand for computing power from clients has reached a stage that cannot be met, especially after the computing explosion triggered by new generation models like DeepSeek, the company is almost being pushed to expand.
"Our clients have clearly told us: Keep building! We can't keep up with their scale."
CoreWeave was founded in 2017, initially as a cryptocurrency mining company named Atlantic Crypto, and later transformed into a cloud computing company providing NVIDIA GPU computing power support for AI training and computing tasksCoreWeave has a close relationship with NVIDIA and is one of NVIDIA's preferred cloud service providers, able to gain priority access to NVIDIA's chips. The company also has a range of well-known AI clients, with major partners including Microsoft, Meta, and IBM