Shareholders Dump Shares, Executives Cash Out — Massive Insider Selling Sparks Market Trust Crisis

TradingKey - Cloud computing company CoreWeave (CRWV.US) saw its stock drop 9.4% on Tuesday, closing at $93.34, amid growing investor concerns over a wave of insider selling following the expiration of a lock-up period in August.

According to U.S. Securities and Exchange Commission (SEC) filings, Magnetar Financial, CoreWeave’s largest shareholder, sold 915,000 shares in August, generating approximately $94.4 million in proceeds. Additionally, Magnetar established a collar options strategy: buying put options with a $70 strike price and selling call options at $175, effectively locking in a price range for its holdings through March 2026 — a clear signal of its intent to hedge against future volatility. Prior to this, Magnetar had already sold over 1.46 million shares in mid-August.

Company insiders also joined the sell-off:

• CEO Michael Intrator sold 82,000 shares, netting about $7.8 million.
• CFO Nitin Agrawal减持 3,512 shares, raising approximately $335,000.
• Corporate Secretary Kristen McVeety fully exited her direct holdings, selling all shares for a total of around $30 million.

The surge in insider selling has intensified scrutiny over CoreWeave’s valuation. Since peaking in June, the stock has fallen nearly 50%, and is down about 38% from its post-earnings high on August 12. That rally followed a Q2 report in which the company posted wider-than-expected losses, disappointing investors.

Gil Luria, analyst at DA Davidson, stated that CoreWeave’s current financial model is “unsustainable” and warned that Q3 results could be even worse.

Even more concerning, the stock’s decline is now threatening a major acquisition. CoreWeave plans to acquire digital infrastructure firm Core Scientific in an all-stock deal valued at approximately $9 billion. However, as CoreWeave’s share price has tumbled from $159.70 at the time of the announcement to under $94, the value offered to Core Scientific shareholders has dropped from $19.72 per share to just $11.53 — casting serious doubt on the deal’s viability.