By Adam Levine

CoreWeave, a hotly anticipated initial public offering, priced on Thursday below its range, at $40 a share for a valuation of $23 billion, raising some $1.5 billion, well below earlier expectations. On Friday, the stock immediately fell, then rallied and finished back at $40. That left the shares valued at 12 times 2024 sales.

That's still a hefty valuation. The S&P 500 currently fetches 2.8 times sales; the Nasdaq Composite, 3.9 times sales. But public companies are growing revenue at much slower rates than CoreWeave's latest 737%. That rate is probably unsustainable but helps explain why the Nvidia-backed crypto miner turned artificial-intelligence cloud company sought such a high valuation in a slow year for IPOs.

One historical comparable for investors to consider is Snowflake, which made its debut in the hot IPO market of late 2020. At the time, the cloud company was growing revenue at 174% a year, and the IPO was priced at 20 times sales.

According to Jay Ritter, a finance professor at the University of Florida's Warrington College of Business, the median price-to-sales ratio for tech IPOs in the past 10 years varied from 4.2 in the slow IPO year of 2016 to 15.2 in the brisk 2021 market, when 121 tech companies went public.

Those figures still pale in comparison to IPOs during the dot-com bubble. In 1999, there were 370 tech IPOs with a median price-to-sales multiple of 27.

Write to Adam Levine at adam.levine@barrons.com

Last Week

Markets

On Monday, President Donald Trump appeared to narrow April 2 tariffs, leaving out key industrial products and dangling exemptions, though he threatened 25% tariffs on any country that bought Venezuelan oil. Stocks rose. But consumer confidence registered a four-year low, and stocks plunged as Trump announced 25% tariffs on imported cars, light trucks, and parts starting on April 3. On Friday, core inflation and incomes ticked up. On the week, the Dow industrials fell 1%; the S&P 500, 1.5%; and the Nasdaq Composite, 2.6%.

Companies

A Georgia jury told Bayer to pay $2.1 billion in a Roundup suit. Boeing is trying to drop its guilty plea for deceiving regulators before two deadly crashes. Shell said that it would boost oil and gas production, and share buybacks. Tesla sales in Europe plunged 49% in February. BYD said that it aims to double overseas sales in 2025. Auto stocks, home and abroad, fell on coming U.S. tariffs.

Deals

The South China Morning Post said Li Ka-shing would not go ahead with the Panama ports deal as China readies an antitrust probe...Trump said he might reduce China tariffs for its OK on a TikTok deal....Genetic testing company 23andMe filed for Chapter 11. CEO Anne Wojcicki quit after failing to buy the company...Building materials company James Hardie Industries agreed to buy AZEK, a maker of outdoor products, for $8.75 billion... Dollar Tree agreed to sell its Family Dollar unit to two private-equity firms, for $1 billion.

Next Week

Tuesday 4/1

The Institute for Supply Management releases both its Manufacturing and Services Purchasing Managers' Indexes for March. Consensus estimates are for a 49.5 reading for the Manufacturing PMI, released on Tuesday, and a 53 reading for the Services PMI, released on Thursday. Both estimates would be slightly less than their respective February readings.

The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey. Expectations are for 7.7 million job openings on the last business day of February, about even with the January figure.

Wednesday 4/2

President Donald Trump is expected to announce reciprocal tariffs focused on the "Dirty 15," the 15% of countries with highest tariffs and trade imbalances with the U.S. These tariffs would probably be on top of what the White House has already announced, including a 25% levy on all imported aluminum, steel, auto parts, and vehicles.

Friday 4/4

The Department of Labor releases the jobs report for March. Economists forecast a 138,000 increase in nonfarm payrolls, after a 151,000 gain in February. The unemployment rate is expected to remain unchanged at 4.1%.

The Numbers

6.6 K

Number of deals announced globally in the quarter, down almost 30% from 2024, 44% below 2021's peak.

30%

Rise in copper prices in 2025 to a record $5.3740 a pound on Wednesday, driven by tariff fears.

245 K

Average annual Wall Street bonus in 2024, a record, and up almost a third over the prior year.

70%

Estimated reduction in flight bookings through the end of September between Canada and the U.S.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 28, 2025 19:16 ET (23:16 GMT)

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