Form 4: Magnetar Funds Establish Collar on CoreWeave Stock

Magnetar Financial and related entities have entered into a collar arrangement involving nearly 2 million shares of CoreWeave Class A Common Stock, setting price bounds for future transactions.

Summary

• Magnetar Financial LLC, along with Magnetar Capital Partners LP, Supernova Management LLC, and David J. Snyderman, reported a collar arrangement on CoreWeave, Inc. Class A Common Stock.
• The transaction, dated August 21, 2025, involves writing covered call options with a strike price of $155 and purchasing put options with a strike price of $70.
• These options cover an aggregate of 1,999,000 shares of CoreWeave Class A Common Stock.
• All derivative securities have an expiration date of June 18, 2026.
• Under the collar arrangement, only one option (call or put) can be in-the-money at expiration, leading to its exercise and settlement in shares, while the other expires. If neither is in-the-money, both options will expire.
• The underlying securities are held directly by various Magnetar Funds, including Magnetar Constellation Master Fund, Ltd, CW Opportunity LLC, Magnetar Alpha Star Fund LLC, Magnetar Capital Master Fund, Ltd, Magnetar Lake Credit Fund LLC, Magnetar Longhorn Fund LP, Magnetar SC Fund Ltd, Magnetar Structured Credit Fund, LP, Magnetar Xing He Master Fund Ltd, Purpose Alternative Credit Fund F LLC, and Purpose Alternative Credit Fund T LLC.
• The reporting persons disclaim beneficial ownership of these shares of Common Stock, except to the extent of their pecuniary interest therein.

Sentiment

Score: 6

Explanation: The filing details a standard risk management strategy (collar arrangement) by a significant shareholder and director. This indicates a desire to protect the value of a substantial equity position in CoreWeave while limiting extreme upside, suggesting a measured approach to their investment rather than a strong bullish or bearish signal.

Positives

• The collar arrangement provides a defined range for potential gains and losses on the underlying CoreWeave Class A Common Stock, offering a degree of risk management for the Magnetar Funds.
• The strategy indicates a continued interest in CoreWeave's equity while managing exposure to significant price fluctuations.

Negatives

• The collar arrangement caps potential upside gains on the underlying shares if CoreWeave's stock price rises significantly above the call option strike price of $155.
• The purchase of the put option, while providing downside protection, incurs a cost (premium paid) as reflected in the 'Price of Derivative Security' for the put options.

Risks

• The primary risk is that CoreWeave's stock price could move outside the collar range ($70-$155) at expiration, leading to either limited upside or the exercise of the put option if the price falls below $70.
• The effectiveness of the collar depends on the future performance of CoreWeave's Class A Common Stock relative to the established strike prices.

Future Outlook

The filing does not provide explicit forward-looking statements or guidance beyond the expiration date of the derivative securities on June 18, 2026, which implies the duration of this specific risk management strategy.

Management Comments

• "The entity holding the underlying shares of Class A common stock (the 'Common Stock') of CoreWeave, Inc. entered into a collar arrangement pursuant to which such entity wrote a covered call option and purchased a put option."
• "Only one of the options can be in-the-money on the expiration date, at which time the in-the-money option will be exercised and settled in shares and the other option will expire. If neither option is in-the-money on the expiration date, both options will expire."
• "Each of the Magnetar Funds, Magnetar Financial, Magnetar Capital Partners, Supernova Management and David J. Snyderman disclaims beneficial ownership of these shares of Common Stock of the Issuer, except to the extent of its or his pecuniary interest therein."

Industry Context

This transaction reflects a common strategy employed by institutional investors and large shareholders to manage risk and generate income from significant equity positions. Collar arrangements are often used to protect against downside risk while simultaneously capping upside potential, typically in volatile or uncertain market conditions, or when an investor wishes to hold a stock but reduce exposure to extreme price movements. The involvement of a 10% owner and director suggests a strategic approach to their substantial holding in CoreWeave, a company likely operating in a high-growth or capital-intensive sector given the nature of its business (implied by the ticker CRWV and the high option prices, though the filing doesn't explicitly state CoreWeave's business).

Comparison to Industry Standards

• The use of a collar strategy is a standard risk management technique in the financial industry, particularly for large block holders or insiders.
• Comparable strategies are often seen in private equity exits, pre-IPO hedging, or for long-term holders seeking to monetize a portion of their position while retaining ownership.
• For instance, executives at tech companies like Palantir Technologies (PLTR) or Snowflake (SNOW) have utilized similar hedging strategies post-IPO to manage concentrated stock positions.
• The specific strike prices of $70 and $155, with an expiration in June 2026, suggest a view on CoreWeave's valuation range over the next year, indicating a belief that the stock will likely trade within or around this band, or a desire to protect against a significant drop below $70 while being willing to forgo gains above $155.

Stakeholder Impact

• Shareholders: The collar arrangement by a 10% owner and director could be interpreted as a signal of the reporting person's view on the stock's expected trading range. It might reduce the number of shares available for trading if the call option is exercised, or increase if the put option is exercised, but the immediate impact is minimal as it's a derivative transaction.
• Company (CoreWeave): The transaction itself does not directly impact CoreWeave's operations or financial health, but it reflects a significant investor's risk management strategy.

Next Steps

• The options will expire on June 18, 2026.
• Depending on CoreWeave's stock price at expiration, either the call option or the put option will be exercised and settled in shares, or both will expire.

Key Dates

Recommendation

The filing describes a hedging strategy by a significant shareholder, not a direct buy or sell signal. A collar arrangement suggests the investor intends to hold the underlying shares but wishes to limit both downside risk and upside potential within a defined range. This indicates a neutral to cautious stance on the stock's near-term extreme movements, making a 'hold' recommendation appropriate for investors seeking to align with this measured approach.

Keywords

CoreWeave, CRWV, Magnetar Financial, Magnetar Capital, Supernova Management, David J. Snyderman, SEC Form 4, beneficial ownership, collar arrangement, call option, put option, derivative securities, risk management, equity, investment