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CoreWeave Turns $50 Million Loan Into $12.5 Billion AI Jackpot For Billionaire Investor
CoreWeave Inc-ACoreWeave Inc-A(US:CRWV) Benzingaยท2025-10-08 14:35

Core Insights - Magnetar Financial has transitioned from shorting subprime debt to becoming a major player in the AI sector, with a significant investment in CoreWeave Inc. that has grown from a $50 million loan to a $12.5 billion stake, representing nearly 72% of Magnetar's $20.5 billion portfolio and resulting in a 145% quarterly gain [1][2]. Investment Strategy - The initial investment in CoreWeave was made through structured loans secured by high-end Nvidia processors, with Magnetar leading a $7.5 billion loan to CoreWeave and Blackstone in 2024, marking one of the largest private debt financings [3]. - As of September 30, Magnetar held 91.4 million shares of CoreWeave, approximately 23% of the company, despite reducing its position by about 4.4 million shares, which still yielded a 247% gain as CoreWeave's stock increased over 220% year-to-date [4]. Market Position - Magnetar's concentrated investment in a single AI company is drawing attention on Wall Street, with some investors expressing concerns about the venture-like nature of this exposure, although the returns are currently substantial [5]. - The shift from the 2008 "Magnetar trade," which profited from the housing collapse, to a focus on AI infrastructure illustrates the importance of timing in finance, as highlighted by Alec Litowitz's strategic moves [6].