Deutsche Bank signaled a buy-the-dip opportunity after $CRWVB plunged, with a target price of $150—about 2.5x the current price of $60.
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CoreWeave $CRWVB suffered a double hit to its stock and bonds on Wednesday, with its share price falling 15.46%. Oracle $ORCLB was also dragged down.
Its 2032 bonds carry a 9.625% coupon, but their price has fallen below 80 cents on the dollar. The yield to maturity is around 14.8%, and the spread over Treasuries has crossed the 1,000-basis-point warning threshold for default risk. The cost of five-year CDS has risen to around 881 basis points, implying a default probability of more than 50%.
One thing needs to be made clear. The coupon is fixed, so a yield spike to 15% does not change the interest expense on bonds already issued; it reprices the next round of financing. But the books were already tight: second-quarter revenue was $2.575 billion, adjusted operating profit was $128 million, and net interest expense was $640 million—five times operating profit. A $104.2 billion backlog sounds huge, but orders are not cash.
The trigger was a hotter-than-expected CPI reading that pushed up long-term rates, with the 30-year Treasury briefly touching 5.63%. Oracle's bond yield rose to 7.24%, and the cost of default protection for both companies hit all-time highs. This looks more like credit differentiation than the start of industry-wide defaults. Two variables to watch: whether yields can stay below 15%, and the terms of the next financing round.
#CoreWeave #甲骨文债市定价崩裂 #BStocks
Its 2032 bonds carry a 9.625% coupon, but their price has fallen below 80 cents on the dollar. The yield to maturity is around 14.8%, and the spread over Treasuries has crossed the 1,000-basis-point warning threshold for default risk. The cost of five-year CDS has risen to around 881 basis points, implying a default probability of more than 50%.
One thing needs to be made clear. The coupon is fixed, so a yield spike to 15% does not change the interest expense on bonds already issued; it reprices the next round of financing. But the books were already tight: second-quarter revenue was $2.575 billion, adjusted operating profit was $128 million, and net interest expense was $640 million—five times operating profit. A $104.2 billion backlog sounds huge, but orders are not cash.
The trigger was a hotter-than-expected CPI reading that pushed up long-term rates, with the 30-year Treasury briefly touching 5.63%. Oracle's bond yield rose to 7.24%, and the cost of default protection for both companies hit all-time highs. This looks more like credit differentiation than the start of industry-wide defaults. Two variables to watch: whether yields can stay below 15%, and the terms of the next financing round.
#CoreWeave #甲骨文债市定价崩裂 #BStocks
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