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CoreWeave plans to reduce the size of its U.S. initial public offering and price its shares below the indicated range, a person familiar with the matter told Reuters on Thursday, dampening expectations that the listing would boost investor appetite for IPOs. The Nvidia-backed cloud services provider is now looking to sell 37.5 million shares, 23.5% less than originally planned, and price them at $40 apiece, well below even the low end of the indicated range, the source added, requesting anonymity discussing confidential information. Nvidia will anchor the CoreWeave IPO at the price with a $250 million order, the source said. The sale would raise about $1.5 billion and value CoreWeave at about $23 billion on a fully diluted basis, according to Reuters’ calculations. The company did not immediately respond to Reuters’ request for comment. It is expected to price the IPO later on Thursday. CoreWeaves roadshow, which began last week, received a weaker-than-expected reception as risk-averse investors in a volatile market weighed concerns over the companys long-term growth, financial risks and capital intensity, according to four sources familiar with the matter. Among the concerns is CoreWeaves heavy reliance on Microsoft, whose shifting AI datacenter strategy could impact long-term demand for chips known as graphics processing units, or GPUs. While investors appear comfortable with the companys high leverage since it has strong free cash flow, the risk of commitments not being fulfilled remains a worry. Additionally, CoreWeave’s capital-intensive business model raises questions about sustainability, adding to broader market uncertainty. CoreWeave has been a significant customer for Nvidia, deploying over 250,000 of Nvidia’s GPUs by the end of 2024. Investors’ lukewarm reception to the CoreWeave IPO could signal reduced confidence in the AI infrastructure market, as the scaling of GPU assets in AI training slows down. “The business model doesn’t appear fundamentally flawed, but this suggests investors are recalibrating AI infrastructure valuations,” said Lukas Muehlbauer, research analyst at IPOX. CoreWeave and some existing investors had initially aimed to sell 49 million shares in the offering priced between $47 and $55 each to raise as much as $2.7 billion. That would have valued the company at up to $32 billion on a fully diluted basis. Mounting concerns CoreWeave’s stock market debut has been closely watched as a test of the strength of a recovery in the U.S. IPO market and whether investor enthusiasm for AI newcomers remains strong or has started to wane. The number of U.S.-listed equity capital markets deals, including both IPOs and block trades of shares, fell to 187 in the first three months of this year, down from 243 during the same period last year, according to Dealogic data through Wednesday. The total value of these transactions also dipped, falling from $74.02 billion to $63.48 billion. Despite the AI boom, there are growing concerns that data center spending will be uneven, with investments concentrated among a few giants while others struggle to keep pace. DeepSeek, China’s low-cost AI rival, has also emerged as a growing threat, fueling concerns about pressure on data center spending. CoreWeave had debt of about $8 billion as of last year. It also leases its 32 data centers and some equipment, instead of owning them, resulting in operating lease liabilities of $2.6 billion. In its offering filing, the company had said about $1 billion of the IPO proceeds would be used to pay down debt. The company has said it would continue to borrow. CoreWeave has yet to turn a profit, and IPO investors in the last few years have been wary of backing companies with no history of profitability. Ahead of its IPO, CoreWeave secured partnerships with major AI players, including Sam Altman’s OpenAI. Earlier this month, it signed an $11.9 billion infrastructure deal with the ChatGPT maker. The cloud services provider, which offers access to data centers and high-powered Nvidia chips for AI workloads, will also issue $350 million in shares to OpenAI through a private placement as part of the offering. Morgan Stanley, J.P. Morgan and Goldman Sachs are the lead underwriters of the IPO. The downsizing was first reported by Semafor on Thursday. Echo Wang, Krystal Hu, Milana Vinn, Manya Saini, Niket Nishant, and Ateev Bhandari, Reuters
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E-Commerce
As the global auto world reeled from the potential fallout of Donald Trump‘s new auto tariffs, one name stood out as less affected than otherselectric-vehicle maker Tesla. The Texas-based company’s shares were the rare automotive stock to trade in the green in U.S. action, as analysts said Tesla’s supply chain and financial performance may not be affected by the wide-ranging levies that will affect global shipments of both cars and car parts to the United States, mainly due to the company’s largely domestic production. Still, that relief in the United States, where Elon Musk has become one of President Trump’s primary advisers, tasked with swiftly cutting federal spending, may not improve the brand’s reputation worldwide. Tesla shares have plunged more than 40% since peaking in mid-December as a protest movement against the EV company has erupted in the U.S. and around the world as the Musk-led Department of Government Efficiency has drawn heavy criticism for going after federal workers. The stock was up about 2% on Thursday. The 25% tariffs are expected to disrupt the global automotive industry, raise the cost of vehicles in the United States, and pinch automakers’ earnings. Shares of Ford, General Motors and Chrysler-parent Stellantis were down between 2.1% and 7%. While Tesla does import some parts from around the world, the company largely produces its vehicles in the United States. Analysts expect Tesla to report deliveries of about 398,000 vehicles when it reports figures for the first quarter next week, according to 20 analysts polled by Visible Alpha. Trump said the duties announced on Wednesday could be net neutral or even good for Tesla, adding that his close ally Musk did not advise him regarding auto tariffs. Several administration officials have defended Tesla in public comments in recent days, ranging from urging people to buy its stock to opening investigations into vandalism at Tesla dealerships. Still, Musk late on Wednesday said, “To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial.” Tesla imports lithium-ion batteries from China’s Contemporary Amperex Technology Ltd and other automotive parts from countries such as South Korea, Japan and Mexico, according to import filing data through the end of February provided to Reuters by ImportYeti. Car prices could rise by $5,000 to $15,000 if a 25% tariff on imported cars is maintained, according to Goldman Sachs. Automakers are likely to pass on the impact of tariffs to customers by raising prices, and that could close the price gap between Tesla’s electric vehicles and competing gas-powered cars, analysts said. “Tesla is a relative beneficiary given 100% U.S. production footprint, substantial U.S. sourcing and with Model Y competing in a midsize crossover segment where close to ~50% of vehicles could be subject to tariffs,” TD Cowen analysts said in a note. While Trump’s tariffs may benefit Tesla in the United States, the automaker faces mounting challenges in Europe and Canada, where political sentiment and reduced electric vehicle incentives are eroding its competitive position. In Britain and the European Union, Tesla is grappling with policy headwinds and shrinking subsidies that threaten to dampen demand and slow its growth trajectory. Canada has frozen a rebate program for Teslas. “Musk’s involvement with Trump might be a factor weighing on sales outlook outside of the United States,” Sandeep Rao, senior researcher at Leverage Shares, said. Akash Sriram, Arsheeya Bajwa and Richa Naidu, Reuters
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E-Commerce
Trading platform Robinhood, best known for introducing a new generation of traders to the stock market, crypto, and ETFs, is growing up alongside its customers, moving one step closer to becoming a full financial service company the likes of Fidelity or Charles Schwab. On Wednesday, the digital brokerage announced plans to launch Robinhood Banking this fall, a one-stop service that provides traditional checking and savings accounts with luxury benefits, as well as Robinhood Strategies, a wealth management product. Customers will need a Gold subscription, which runs $5 a month or $50 a year, to open those individual and joint checking accounts, which will allow users “to send money across the world in over 100 currencies, and even get cash delivered directly to you” (more on that below). Robinhood’s new financial products will include new tools for wealth-management, AI-powered investment advice, access to tax advisors, estate planning, and instant transfers between Robinhood accounts and FDIC partner institutions for up to $2.5 million. Robinhood said the idea is to give members “access to financial services such as private wealth management and private banking, which were once thought out of reach to many.” But perhaps the most unique perk offered is that customers will be able to have cash delivered to their door same-day, likely as a way to continue to capture younger investors with their smartphones. (Robinhood’s median customer age is now 35, up from 31 five years ago.) Cash deliveries would work similarly to, say, DoorDash, serving up cash instead of food. Other unconventional perks for new banking customers reportedly include discounted helicopter rides. Our goal is for Robinhood to give you a world-class financial team in your pocket, with cutting-edge tools you cant find elsewhere, Vlad Tenev, Robinhood’s chairman said in a statement. Robinhood said in the statement that it would charge Gold members 0.25% annually on managed individual and retirement accounts up to $100,000, with a yearly cap of $250, “which means free management on every dollar over $100k and an effective management fee of 0.1% for portfolios with $250,000 or 0.05% for those with $500,000.” Unlike Robinhood Banking, Robinhood Strategies is already available to all Robinhood Gold members, and will begin rolling out to all customers in April, according to the company’s press release.
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E-Commerce
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