For listed companies that are part of the "new generation of cloud providers" (the industry's term for emerging AI data center enterprises), this is undoubtedly a bad day. Inflation data that fell short of expectations triggered market selling, further reinforcing the expectation that the Federal Reserve may raise interest rates again, resulting in a sharp decline in the stock prices of the new generation of cloud sector companies. Such enterprises typically rely on heavy borrowing to support their business expansion. In this round of declines, CoreWeave was hit the hardest, with its stock price plummeting by 15.5%, and there are concerns that its stock price has fallen to a dangerous level.

CoreWeave CEO and co-founder Michael Intertato has a tough stance. According to a company spokesperson, he said to his employees, "In the process of building a new type of technology company, there will always be stages where there is market misunderstanding and irrational pricing." Nevertheless, the problem may lie in Intertato's lack of understanding of investors' mentality. Securities filing documents show that from April to the end of September, Intertato reduced his holdings of CoreWeave shares on a weekly basis, and several other co-founders also continued to sell their shares. Such behavior is likely to weaken the market's confidence in the company. If Intertato were to commit to suspending his share sales for a period of time, it might be possible to regain some of the investors' goodwill.

CoreWeave issued a statement stating that the co-founders were merely "performing the personal financial planning that any responsible founder holding a large amount of concentrated equity would do." However, Intrato cannot ignore the practical consequences of falling stock prices: in May, his share sales were at $128 per share, and last month the price had dropped to $86; if he were to sell now, he could only get $65 per share.

The root cause of the falling stock price lies in the fact that the company has taken on huge debts to expand, including $4.2 billion in convertible bonds issued last month. At the same time, the company announced that it may issue up to an additional 35 million shares in the future. This aggressive financing strategy not only exposes the company to the pressure of rising interest rates but also faces a situation where market appetite for debt investments related to AI is continuously cooling down.

But CoreWeave seems to have completely ignored these market concerns. In an interview with The Financial Times published on Wednesday, co-founder Branning McPhee stated that the company hopes to borrow from insurance companies, claiming that the insurance industry holds “unlimited” capital. He also said, “In this industry today, scale is everything; you must be among the top players.”

It is true that CoreWeave is in a better position than the other two less mature new-generation cloud companies, Nscale and SB Energy. Both of these companies are seeking to go public, but so far, they have made little progress. There is nothing wrong with Intertato's observation that the market can react excessively, but given the current state of panic in the market, he could at least refrain from continuing to sell a large portion of his shares for now.

Investors are fanatically pursuing Bending Spoons

Wow! On Wednesday, investor sentiment was extremely high, and the stock price of Bending Spoons soared by 41%, closing at $53.46. This frenzy stemmed from news disclosed by this Italian digital group: the legendary investment institution Berkshire Hathaway (where Warren Buffett recently stepped down as CEO) agreed to invest $330 million in it through a private placement.

What is more noteworthy is that Bending Spoons revealed that Berkshire had purchased a large amount of shares in July during the company's IPO. Today, it holds about 4% of the shares, making it one of the largest external shareholders, second only to the co-founders.

It's not difficult to understand the mentality of investors following in Berkshire Hathaway's footsteps, but rationally speaking, the reasonable bid from investors should be based on Berkshire's purchase price of $33 per share. This price is slightly discounted compared to the trading price of the past week, but it basically matches the stock price level for most of the time after IPO. Compared to Berkshire's cost, a premium of $20 per share paid by the market is completely illogical.

Responsible Editor: Guo Mingyu