CoreWeave is getting trounced along with most other high-beta growth companies in early trading on Tuesday, as its top shareholder as well as some of its executives continued to take profits in the name they’re finally allowed to sell.
Last Thursday, Magnetar Financial, its subsidiaries, and insiders sold $94.4 million (or 915,339 shares) of the AI cloud computing company. Magnetar had previously unloaded about 1.5 million shares earlier in August after the post-IPO lockup period expired.
The firm also entered into a series of derivatives transactions last week designed to protect the value of its CoreWeave position by:
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Selling 600,000 call options that expire on March 20, 2026, with a strike price of $175 and buying just as many put options with the same expiry and a strike price of $70 on Thursday;
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Selling 801,000 call options that expire on March 20, 2026, with a strike price of $160 and buying just as many put options with the same expiry and a strike price of $70 on Wednesday.
This is known as a “collar” trade. Magnetar spent about 22% more on the put options than it generated in premiums by selling the calls.
Ahead of the lockup expiry, Bank of America analyst Brad Sills warned of a “near term overhang” for the stock because of the potential for this selling to occur, and indeed it has.
Elsewhere, filings show that CoreWeave CEO Michael Intrator sold about $7.8 million (or 82,455 shares) on Wednesday, while General Counsel and Corporate Secretary Kristen McVeety exercised a stock option and also sold nearly $30 million (or 311,796 shares), all of her direct stake in the company. She maintains an indirect position of 95,000 shares through a grantor-retained annuity trust.
Note: These insider trades were part of a prescheduled 10(b)5-1 program, and as such were not discretionary in nature.
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