CoreWeave (CRWV) Insiders Sell over $1B Worth of Shares as IPO Lock-Up Period Ends

Business Insider

2 days ago

CoreWeave (CRWV) insiders began selling shares today after the AI data center company's IPO lock-up period expired. As a result, this triggered more than $1 billion in block trades that were organized by Morgan Stanley (MS), JPMorgan Chase (JPM), and Goldman Sachs (GS). Among those selling was board director Jack Cogen, who sold nearly $300 million worth of stock. Interestingly, even though CoreWeave's stock had plunged by 35% in the previous two days due to disappointing second-quarter results, shares stabilized around the $100 level to close slightly up on the day.
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The spike in trading activity happened because about 84% of CoreWeave's Class A shares became available for the first time since its IPO in March. According to the Financial Times, which cited sources close to the matter, banks scrambled on Thursday evening to arrange block trades as large as six to eight million shares. For context, block trades like these allow large investors to sell shares quietly, often at a discount, without overwhelming the market. Nevertheless, while CoreWeave has benefited from the AI infrastructure boom, concerns about its financial health are growing.
Indeed, the company reported rising losses and surging operating expenses, which hit $1.2 billion in Q2 – almost four times higher than a year ago. On top of that, CoreWeave is facing investor pushback over its proposed $9 billion acquisition of Core Scientific (CORZ), as some shareholders of the target company have threatened to vote against it unless better terms are offered. It also doesn't help that, as of Thursday, 46% of CoreWeave's tradable shares were being shorted, thereby indicating that many investors are betting that the stock will continue to fall.
Is CRWV a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on CRWV stock based on six Buys, 16 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CRWV price target of $115.29 per share implies 15.3% upside potential.