CoreWeave Inc. (NASDAQ:CRWV) shares were volatile on Friday after top executives sold more than $1 billion worth of stock, marking one of the largest insider sell-offs of the third quarter.
The transactions followed the expiration of the company’s lockup period in mid-August, positioning CoreWeave leaders among the top 10 insider sellers of the quarter.
The wave of sales at CoreWeave coincided with similar moves from executives at Nvidia Corp. (NASDAQ:NVDA) and Snowflake Inc. (NYSE:SNOW), underscoring the outsized gains and investor enthusiasm driving the broader artificial intelligence sector.
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The surge in AI-related valuations has spurred record insider activity across the industry. This marked the first opportunity for CoreWeave insiders to cash out since the company’s March initial public offering, which minted four new billionaires.
Since going public, CoreWeave’s stock has soared more than 250%, buoyed by strategic deals with Nvidia, as well as expanded partnerships with OpenAI and Meta Platforms Inc. (NASDAQ:META).
According to Bloomberg, Director Jack Cogen sold $477 million in shares, while co-founder Brannin McBee netted $426 million. Both transactions were executed through pre-arranged 10b5-1 trading plans linked to price forecasts.
Institutional holders also took profits. Magnetar Financial LLC, CoreWeave’s largest shareholder, sold nearly $1.9 billion in stock but continues to hold more than 20% of the company’s Class A shares. Data from Washington Service show that seven of the top 10 third-quarter insider sellers were from AI-focused companies.
The insider activity arrives amid growing scrutiny of CoreWeave’s aggressive capital spending. Prominent short-seller Jim Chanos criticized the company’s financial model, contending that its heavy infrastructure investments fail to produce adequate returns.
Chanos referenced CEO Michael Intrator’s comments on CNBC’s Mad Money, where Intrator claimed customers are willing to rent CoreWeave’s graphics processing units (GPUs) for 6 or 7 years.
Based on that assumption, Chanos calculated that amortizing the company’s $19.1 billion in capital spending over that timeframe equates to $2.729 billion in annual “economic depreciation”, a figure exceeding CoreWeave’s second-quarter annualized EBITDA of $2.62 billion. That implies a 0% return on invested capital, Chanos said.
Intrator has sought to reassure investors, emphasizing CoreWeave’s software stack and its critical role in the AI infrastructure ecosystem. Following the company’s all-stock acquisition of infrastructure partner Core Scientific Inc. (NASDAQ:CORZ), he reiterated that CoreWeave’s technology foundation and long-term strategy remain intact.
CRWV Price Action: CoreWeave shares were trading higher by 0.54% to $143.85 at the time of publication on Friday.
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