CoreWeave bond default odds explained
The detail that got me from Nobody Special's breakdown isn't the default number, it's the part where Fidelity and Magnetar Capital come up. Those two hold most of the secured debt that's collateralized by CoreWeave's GPUs, and per the commentary they dumped $5,000,000,000,000 worth of CoreWeave stock in the last year. Meanwhile the bond market is pricing a 50% chance CoreWeave defaults on this bond within five years, which the commentary calls deeply distressed and straight up garbage debt, and it's worth remembering that's the unsecured debt. The secured billions sitting on the GPU collateral are a whole separate pile. And the kicker tying it to The Big Short: the sushi restaurant scene where Steve Carell's character messes up the guy's hair and calls him a colossal POS? The commentary says that actually happened. So the movie reference isn't just a bit here, it's the whole frame for how the bond market works.
