CoreWeave CEO: "Share Sale Plan on Hold"... Shares Surge on Strong Results
Earnings improve despite AI bubble concerns
"Not concerned about additional data center regulations"
CoreWeave, a U.S. AI cloud company, surged more than 20% after reporting third-quarter results that beat expectations and saying it would put its planned share sale on hold. CEO Mike Intrator also expressed confidence, saying he was not particularly concerned about the risk of additional data center regulations after the U.S. midterm elections.
In an interview with CNBC on Nov. 11 (local time), Intrator said, "The 10b5-1 plan is on hold until there is a material change in the share price," adding, "Any additional share sales in the future, if they take place, would be part of routine tax-related procedures." A 10b5-1 plan is an arrangement under U.S. Securities and Exchange Commission (SEC) rules in which company insiders prearrange stock sales to avoid allegations of insider trading.
Intrator previously sold a total of 8.26 million shares he held under a 105b-1 plan established in November last year. Amid concerns about an AI bubble and Intrator's share sales, CoreWeave's stock had been weak for some time, drawing strong criticism from investors.
Analysts say the company's strong third-quarter results may have influenced Intrator's decision to halt further share sales. According to CNBC, CoreWeave announced on Nov. 10 that third-quarter revenue had surged 168% year over year to $3.66 billion (about 4.9 trillion won). Adjusted EBITDA also surged 169% from a year earlier to $2.26 billion.
During the earnings call, Intrator also expressed confidence that the regulatory impact on data centers would be limited, despite the Democrats' sweeping victory in the U.S. midterm elections. He said, "We do not expect an impact from the rapid regulatory changes that have taken place," adding, "We believe these changes send an important message about how we build. We want to build responsibly."
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With Intrator's remarks about halting share sales coinciding with strong earnings, CoreWeave shares surged 24.71% from the previous session to close at $60.77.
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