a 15% loan yield, a 15.5% one-day drop, and a correction to my own earlier call
CoreWeave fell 15.46% on 14 Oct to $65.78, on about 107M shares against a three-month average near 29.5M. Nothing in the business changed that day. What moved was the price of its debt.
There were four triggers. A chart on 13 Oct showed one CoreWeave loan quoted near a 15% yield, up from about 9% this summer. CreditSights said its unsecured bond yields had risen to nearly 15%. Gartner predicted that 80% of "neoclouds" could disappear by 2030. And hotter September inflation lifted yields across the market. The 15% figure is as reported, and I couldn't verify it independently.
The business is still growing fast. Q2 revenue was $2.6B, up 112%, 2026 guidance is at least $12.4B, and remaining contracted work is $103.7B. But the model is borrowing to build. Trailing capex is about $20.6B against operating cash flow of $6.9B, so free cash flow is about −$13.7B. Debt and lease obligations were around $52B at end-June, and Q2 interest expense was about $640M. Shares are up 75.6% year on year, and on 17 Sep it proposed a $3.0B convertible and a 35M-share programme. Two customers were 63% of first-half revenue.
That's why a loan yield matters. If each GPU dollar earns more than it costs to fund, the backlog becomes equity value. If not, more volume destroys value faster. My scorecard gives it 37/100, last of eighteen.
My sell-put gates at $65.78 all fail:
Legal: a class-action notice from 30 Sep is still inside my 30-day window.
200-day SMA ($92.53): the stock is 28.9% below it.
20 EMA: below a falling 20 EMA near $83.5.
Volatility: IVR 19.2, IVP 17.9, from 13 Oct, before the drop.
Earnings: 9 Nov or 16 Nov, so I use the earlier date.
Size isn't the issue, since a $59 strike is $5,900 a contract. The trend, the date and the financing are. I'd reassess if new debt is raised at single-digit rates, free cash flow turns positive, or the price closes back above the 200-day.
Personal framework, not investment advice.
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