Form 4: Magnetar Funds Establish Collar on CoreWeave Stock

Magnetar Financial and related entities reported establishing collar options on 91,781 shares of CoreWeave Class A Common Stock, effective August 28, 2025, as part of a pre-planned strategy.

Summary

• Reporting persons, including Magnetar Financial LLC, Magnetar Capital Partners LP, Supernova Management LLC, and David J. Snyderman, who are 10% owners and directors of CoreWeave, Inc., reported establishing a collar arrangement.
• The arrangement covers a total of 91,781 shares of CoreWeave Class A Common Stock.
• This transaction, effective August 28, 2025, involves writing covered call options with a strike price of $175 and purchasing put options with a strike price of $70.
• The call options generated a total premium of $642,467, while the put options cost a total premium of $734,248.
• The net cost of establishing this collar strategy is $91,781, or $1.00 per share, for the period until the options' expiration on March 20, 2026.
• The transaction was executed under a Rule 10b5-1(c) plan, indicating a pre-planned strategy for managing the equity position.
• The underlying shares are held by Magnetar Xing He Master Fund Ltd, Purpose Alternative Credit Fund F LLC, and Purpose Alternative Credit Fund T LLC.

Sentiment

Score: 6

Explanation: The establishment of a collar strategy by a significant owner indicates a proactive approach to managing risk and return on a substantial equity position. While it limits potential upside, it also provides downside protection, suggesting a balanced view on the stock's future performance.

Positives

• The collar strategy provides downside protection for the 91,781 shares of CoreWeave Class A Common Stock, limiting potential losses if the stock price falls below $70 per share.
• The transaction was pre-planned under a Rule 10b5-1(c) plan, demonstrating a structured and compliant approach to managing a significant equity position.
• The net cost of the collar is relatively low at $1.00 per share, indicating an efficient hedging strategy.

Negatives

• The collar strategy caps the upside potential of the 91,781 shares, as the reporting person is obligated to sell at $175 per share if the stock price rises above this level by the expiration date.
• A net premium of $91,781 was paid to establish the collar, representing a direct cost to the reporting persons.

Risks

• If CoreWeave's Class A Common Stock price remains between $70 and $175 at the March 20, 2026 expiration date, both options will expire worthless, and the net premium paid for the collar ($91,781) will be a realized loss.
• The reporting persons will not participate in any stock price appreciation above $175 per share due to the written call options.
• While downside is protected below $70, the reporting persons still bear the risk of losses between the current market price (not disclosed) and the $70 put strike price, in addition to the net premium paid.

Future Outlook

The establishment of a collar strategy indicates a defined risk/reward profile for the underlying shares until March 20, 2026, suggesting a neutral to moderately bullish outlook with downside protection for the reporting persons' significant holding.

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

Collar strategies are common in investment management to manage risk and generate income, particularly for large shareholders looking to protect gains or limit losses on a significant position. This indicates a sophisticated approach by Magnetar to managing a substantial equity holding in CoreWeave, a company often discussed in the context of high-growth AI infrastructure.

Comparison to Industry Standards

• Collar strategies are a standard risk management tool used by institutional investors and large shareholders to hedge equity positions, aligning with common practices for managing concentrated holdings.
• The use of a 10b5-1 plan aligns with best practices for insiders to execute pre-planned trades, reducing concerns about insider trading and providing transparency.
• The specific strike prices ($70 put, $175 call) define a particular risk/reward corridor for CoreWeave stock, which can be analyzed against volatility expectations and analyst price targets for similar high-growth technology companies or private market valuations.

Related Party Transactions

• The filing details the relationships between the reporting persons (Magnetar Financial LLC, Magnetar Capital Partners LP, Supernova Management LLC, and David J. Snyderman) and their roles as 10% owners and directors of CoreWeave, Inc. The reported derivative transactions are executed by these related parties.

Stakeholder Impact

• Shareholders: The collar strategy by a 10% owner could be interpreted as a move to lock in value or protect against downside, potentially signaling a more cautious outlook on the stock's extreme upside potential by a sophisticated investor.
• Company (CoreWeave): The transaction itself does not directly impact CoreWeave's operations or financials, but it reflects how a major investor is managing its stake.

Next Steps

• The derivative options will expire on March 20, 2026.
• At expiration, either the put or call option will be exercised if in-the-money, or both will expire if out-of-the-money, as per the collar arrangement.

Key Dates

Recommendation

The establishment of a collar by a significant institutional investor indicates a strategy to hold the underlying shares while hedging against significant downside risk and capping extreme upside. This suggests a neutral to moderately positive outlook, where the investor is comfortable with the current valuation range but seeks to protect capital, making a 'hold' recommendation appropriate for other investors considering the stock.

Keywords

CoreWeave, CRWV, Magnetar Financial, Magnetar Capital, Supernova Management, David J. Snyderman, Form 4, SEC filing, beneficial ownership, derivative securities, call option, put option, collar strategy, 10b5-1 plan, equity derivatives, investment strategy