(Dec 8): CoreWeave Inc shares fell after the company unveiled plans to raise US$2 billion by issuing debt that can be exchanged for shares.
The Livingston, New Jersey-based artificial intelligence (AI) infrastructure company is offering the notes due in 2031 with a 1.5% to 2% coupon, according to people familiar with the matter. Shares fell as much as 7% to US$82.10 in premarket trading.
The AI computing firm will issue the convertible notes in a private offering, with an option to increase the deal by an extra US$300 million, the company said in a statement. The bonds are being sold with a conversion premium of 25% to 30%, said the people, who asked not to be identified as the information isn’t public.
The offering is scheduled to price after Monday’s market close, the people added. A representative for the company declined to comment beyond the details in the press release.
CoreWeave, which held its initial public offering in March, has attracted investors looking to bet on the explosion in AI spending. The company is a close partner of AI chipmaker Nvidia Corp and counts OpenAI and Microsoft Corp among its customers.
The firm will use part of the proceeds to enter into a derivatives transaction intended to reduce the the risk of diluting its stock if the notes convert into shares. The rest of the proceeds will be used to help keep its business running.
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