By Adam Clark and Nate Wolf
CoreWeave stock dropped Monday after the cloud-computing company said it was offering $2 billion in debt that can be converted into shares.
CoreWeave plans to issue $2 billion of convertible senior notes due 2031 in a private placement, with an option for initial purchasers to buy up to an additional $300 million.
The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering, which is expected later Monday evening.
Shares closed Monday down 2.3% at $86.24, having recovered some of their losses from earlier in the session. The stock has fallen 17% over the last month.
CoreWeave's debt has become a focus for investors in recent months. Spreads on its five-year credit default swaps had risen to 642.965 at Friday's close, according to Bloomberg data, from 368.395 on Oct. 6, a sign that investors were willing to pay more for insurance against default. Credit-default swaps on single companies can be volatile because they are often thinly traded.
The company's debt load stood at $14 billion at the end of September. High interest expenses contribute significantly to its costs, with its recent unsecured senior notes priced at a 9% interest rate.
CoreWeave declined to comment ahead of the pricing details. The company has consistently argued that it takes on debt to make available computing power that customers have already agreed to buy at guaranteed prices.
Originally a cryptocurrency miner, CoreWeave has redirected its computing capacity toward artificial-intelligence workloads. Barron's wrote recently about its 'neocloud' business model, noting its heavy debt load but also the potential for shares to gain if AI computing demand continues to outstrip capacity.
Among other neocloud companies, Nebius Group shares rose 2.3% on Monday and IREN jumped 3.7%.
Write to Adam Clark at adam.clark@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 08, 2025 17:51 ET (22:51 GMT)
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