More detail has been forthcoming on the hotly anticipated CoreWeave IPO in the US. It remains to be seen whether current negative sentiment in the S&P 500 will persuade the banks involved to delay the listing as they wait to see what happens next in US markets.
CoreWeave is apparently going to issue $350m in shares to OpenAI as part of a private placement ahead of any IPO. This helps to put a valuation on CoreWeave of around $35bn. The company has reported growth in revenue to a staggering $1.9bn in 2024, up from only $228m in 2023.
However CoreWeave’s net loss has widened to $864m. As part of the deal with OpenAI CoreWeave will provide infrastructure to the AI champion. CoreWeave provides access to data centers as well as high-powered chips which can manage the sorts of workloads generated by AI.
The IPO will arguably be one of the hottest on the slate in the US market this year, but a cloud hovers over the listing with the S&P 500 now down to levels not seen since before the US presidential election. The so-called Trump dividend has effectively evaporated.
US exchanges are at pains to quell the panic. Adrena Friedman, CEO at Nasdaq, said this week her exchange has a solid pipeline of interesting IPOs coming through this year. She admitted that markets are currently still in a period of uncertainty, but “we have to assume that there will be windows that will open. The underpinning economy remains resilient.” What else could she say?
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Hinge Health
Despite the pessimism in the market, Hinge Health, which provides digital exercise therapy programs, has said it will aim to list in New York this year. The company was valued at $6.2bn during a 2021 funding round. It also reported a 33.4% increase in revenue in 2024 coupled with a reduction in net loss.
Hinge Health had originally planned to go public in 2022. Management does not seem to be deterred by current stockmarket volatility and is following a trend which has seen several successful US healthcare IPOs in recent months. There seems to be appetite here.
The company was founded in 2014 to provide comprehensive musculoskeletal care for acute injury treatment and chronic pain management. It raised $400m in 2021 in a funding round led by Tiger Global and Coatue Management. Some 14 banks are acting together on this one, including Morgan Stanley and Bank of America Securities.
Venture Global
Disaster for investors in LNG export firm Venture Global which has cratered following its US IPO, illustrating the risks of the current North American IPO market. Shares are down over 60% since it listed, with the company missing earnings expectations last week.
Company management are under fire for changing their story on the stock just weeks after their pre-IPO roadshow, which got big investors excited in the first place. Companies are expected to guide analysts ahead of the IPO on what first quarter earnings should look like. Not in this case it seems.
Venture Global is on track to be the worst performing IPO above $1 billion on a US exchange after two months, according to Bloomberg. It is also on course to beat the record set by SmileDirectClub which saw its stock crater to the tune of over 50% within 60 days of its 2019 IPO. Venture Global is already the worst energy sector IPO above $1 billion in the 30 day post-IPO period. Dubious honours indeed!
