Anthropic’s S-1 leaks (again)—here’s a look at the massive losses on the income statement
In this news:
Key takeaways
- Elon Musk announced that independent directors at Tesla and SpaceX are exploring a $3.5 trillion merger.
- SpaceX shares rose post-market following a third-quarter earnings beat that also lifted tech futures.
- BNP Paribas analysts argue that CoreWeave can service its debt despite recent credit market sell-offs.
Elon Musk said Tuesday that independent directors at Tesla and SpaceX have formed special committees to explore combining the two companies—a deal that, at current market values, would create a roughly $3.5 trillion giant. Musk said he can’t take part in the talks because he is a “conflicted party.”
“This is definitely the kind of question where I feel like I’m tap dancing through a minefield,” Musk said on SpaceX’s third-quarter earnings call, adding that calling a merger a certainty would be “overstating it.”
CoreWeave debt analysis
CoreWeave stock has been a disaster recently after corporate credit investors began selling its debt, pushing the yield on those loans as high as 15%—which, in the private credit markets, is the level you’d expect from a company in distress. However, a new analysis from Daniel Wang and Stefan Slowinski at BNP Paribas suggests that the debt traders are wrong—CoreWeave can pay its debts, they said in a paper titled “A Deep Dive into the Debt Machine.”
CoreWeave’s “active” contracts can generate $6-7 billion in cash flow to service its existing debt and provide “meaningful coverage” of its $1.7 billion in annual interest payments. That is “a potential path towards repaying ~$26 billion of [the company’s] obligations, even if growth capex comes to a halt,” the pair noted.
Global market movements
Traders woke up in a cheerful mood today, shaking off the riots in France and the rising price of oil. Asia was mixed but the European indexes rose in early trading. U.S. futures were up before the open in New York. Nasdaq futures were up 0.43% after SpaceX reported Q3 earnings that solidly beat analysts’ expectations. Both of Elon Musk’s companies rose in overnight trading. SpaceX was up 8.86% post-market, and Tesla rose 1.42%.
S&P 500 futures were up 0.24% this morning. The index rose 0.28% yesterday. In Europe, the Stoxx 600 rose 0.54% in early trading, and the U.K.’s FTSE 100 rose marginally by 0.03% before lunch.
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