CoreWeave CEO seeks to calm staff after shares tumble 15 per cent
CoreWeave chief executive Mike Intrator told employees that markets can sometimes act irrationally after shares fell about 15 per cent, and said the company's backlog more than covers its debt obligations. The AI cloud provider reported a US$104.2 billion revenue backlog in the second quarter and ov
CoreWeave chief executive Mike Intrator told employees on Wednesday that markets can sometimes “misunderstand and act irrationally”, after shares of the AI cloud-computing provider closed down around 15 per cent, according to a memo seen by Reuters.
Intrator said in the memo that the company's deal backlog is large enough to more than support its debt obligations. He added that difficulties and delays observed in the attempted IPOs and debt financings of some of CoreWeave's rivals “are bleeding into the narrative around CoreWeave”.
The comments came as the yield to maturity on CoreWeave's 9.625 per cent bond due in 2032 sat at 14.8 per cent, while its 9.75 per cent bond due in 2031 carried a yield of around 14.9 per cent, levels that signaled distressed credit.
On Tuesday, tech investor Chamath Palihapitiya, founder and CEO of investment firm Social Capital and CEO of AI company 8090, flagged CoreWeave's surging yields on X. His post drew a reply from Tesla and SpaceX chief Elon Musk, who wrote, “yikes”.
CoreWeave reported a revenue backlog of US$104.2 billion (HK$812.76 billion) in the second quarter, up from US$99.4 billion in the first quarter. On top of the backlog, the company said it had secured more than US$25 billion of net new customer commitments in the third quarter.