CoreWeave (CRWV) shares cratered today as investors prepared for the end of the AI data center firm’s IPO lock-up period. Indeed, with the lock-up now over, early investors and insiders will be allowed to sell their shares, which is something they have been restricted from doing since the IPO. This will make up to 83% of CoreWeave’s Class A shares available for trading on Friday, August 15, and potentially create some selling pressure.
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This development comes shortly after CoreWeave reported its second-quarter earnings results. While the company posted an impressive 206.7% year-over-year increase in revenue, the market reacted negatively. As a result, the stock plunged 20% the day after the report, which suggests that expectations may have been even higher, or that investors were concerned about profitability or other financial details not covered by the headline number.
Despite the recent decline, CoreWeave shares have seen huge gains since its IPO in late March, climbing from $40 to as high as $183 by June 20. In addition, the company is trying to make a $9 billion acquisition of Core Scientific (CORZ), although this deal has led to some resistance. In fact, reports suggest that some major Core Scientific shareholders are threatening to vote against the acquisition unless CoreWeave offers better terms, thereby adding uncertainty to the success of the transaction.
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 $120.10 per share implies 16.8% upside potential.
