CoreWeave Issues $2 Billion in Convertible Debt Amid Market Concerns
CoreWeave's stock (CRWV) fell sharply as the AI cloud computing firm announced a $2 billion convertible senior notes offering, exacerbating existing debt worries. The company's total debt now stands at $14 billion, with recent unsecured notes carrying a 9% interest rate—a clear signal of tightening credit conditions.
Credit default swaps tell the real story: spreads widened from 368 to 643 basis points in just three weeks, reflecting growing default risk perceptions. The market responded immediately, sending shares down 4.7% intraday before settling 2.3% lower at $86.24.
Proceeds will fund capped call transactions—a defensive move against share dilution—and general corporate purposes. But investors remain skeptical. The 17% monthly decline in CoreWeave's stock price suggests concerns about debt sustainability outweigh Optimism about AI infrastructure demand.
