On Tuesday, Eastern Time, $CoreWeave, Inc.(CRWV)$ , an AI cloud computing company, made a strong comeback, with its stock price surging by 41.77% to exceed its initial public offering (IPO) price, and its market value broke through $24.3 billion. Another media company, Newsmax, saw a staggering increase of 2,240% within just two days.
The US stock market welcomed the strong performances of two new listings this week. On Tuesday, Eastern Time, CoreWeave, an AI cloud computing company that had been highly anticipated, saw its stock price close with a 41.77% increase, rebounding from the initial IPO underperformance. Meanwhile, another digital media company, Newsmax, soared by more than 22 times within two days after its listing, reminiscent of the "meme stock" rally.
CoreWeave: The largest US tech IPO in nearly three years, with an underwhelming debut
CoreWeave officially went public on the $NASDAQ(.IXIC)$ last Friday, becoming the largest venture capital-backed tech IPO in the United States since 2021. The company's main business is leasing NVIDIA GPU computing power resources to other tech companies, with Microsoft being its largest customer. The IPO price was set at $40, lower than the original pricing range of $47 to $55, and the issuance size was also reduced from the initially planned 49 million shares to 37.5 million shares. Amid macroeconomic uncertainties and Trump's renewed mention of tariff policies, CoreWeave CEO Mike Intrator told CNBC that the company had adjusted the scale and structure of the issuance based on actual buyer interest.
However, despite market expectations for its AI infrastructure concept, the stock opened at $39 on its first day, slightly below the $40 IPO price, and fell more than 6% during the trading session, eventually closing flat. On Monday of this week, CoreWeave fell by more than 10%, dipping below the IPO price and further eroding investor confidence. But on Tuesday, the stock made a strong rebound, closing with a 41.77% increase, rising to $52.57, and its market value exceeded $24.3 billion. According to the prospectus it filed in March, the company's revenue grew by more than 737% last year, reaching $1.92 billion, but it still recorded a net loss of $863 million. Its main competitors include Microsoft, Amazon, Google, and Oracle.
$Newsmax Inc.(NMAX)$ : A 735% surge on the first day and a 22-fold increase in two days
Another newly listed company, Newsmax, officially entered the US stock market on Monday and closed with a staggering 735% increase on its first day, during which the stock was temporarily halted multiple times due to excessive trading activity.
On Tuesday, Eastern Time, the stock soared by another 179.01% during trading, reaching $233, and its market value expanded to $29.92 billion. On its US IPO debut on March 31, the stock had dropped to $14.00, which means that since its listing on Monday, it has surged by 2,240%.
This surge is reminiscent of the "meme stock frenzy" from 2020 to 2021, when stocks like GameStop and AMC Theatres skyrocketed in the short term, driven by retail investors, far exceeding their fundamental valuations.
Bloomberg data shows that Newsmax's revenue last year was only $171 million, which means that if calculated based on the increase on Tuesday morning, its price-to-sales ratio exceeded 85 times, far surpassing the valuation levels of GameStop and AMC Theatres at their peaks. However, the extreme rise of the stock also serves as a reminder for investors to be wary of risks. Data indicates that in the past five years, only seven new stocks in the US market have seen an increase of more than 700% on their first day of listing, but the average stock price of these companies subsequently declined by 94%, with some experiencing a peak drop of nearly 99%.
Is it a new favorite of retail investors or a short-lived carnival? What do you think?
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