South Korean IPO Slumps 30% as CoreWeave Falls Again

TLDR

• Elice shares plunged over 30% on their South Korean IPO debut despite strong demand from retail investors.
• The company raised $151 million through its IPO as concerns grew over AI infrastructure spending.
• CoreWeave stock fell 3% in premarket trading amid rising debt and financing concerns.
• South Korea’s KOSPI dropped nearly 4%, with Samsung Electronics and SK Hynix recording losses.
• Brent crude climbed above $111 per barrel as Middle Eastern supply disruptions added pressure to global markets.

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A South Korean IPO delivered a setback for artificial intelligence investors on Tuesday. Elice Group’s weak market debut came as technology stocks fell and questions grew over data center financing.

South Korean IPO: Elice Drops on Trading Debut

Elice shares ended at 60,500 won on October 20, far below their 90,500 won offer price. The Seoul-based cloud provider raised about $151 million through the listing, which initially valued the company near $755 million.

Demand had appeared strong before trading began. Retail investors subscribed more than 400 times the available shares, while institutional orders reached nearly 389 times their allocation. That interest failed to support Elice’s opening session.

AI Data Center Spending Faces Fresh Questions

The sector continues to pursue large projects. Reports of talks over another $45 billion AI cloud deal between Anthropic and Nscale show how much capacity developers plan to build. The proposed agreement remains under discussion.

Elice intends to direct much of its IPO proceeds toward modular data centers and related equipment. Its first-half revenue tripled to 34 billion won, while operating profit reached 10 billion won, according to Reuters.

Other companies have encountered problems raising capital. Australia’s Firmus canceled its planned flotation, while AirTrunk postponed a Singapore property trust listing. SoftBank-backed SB Energy delayed its proposed United States share sale.

CoreWeave Stock Extends AI Infrastructure Decline

CoreWeave shares fell around 3% in Tuesday’s premarket trading. A recent report on rising borrowing pressure for CoreWeave and Nebius noted that yields on CoreWeave’s unsecured bonds had reached about 15%.

Investors are examining whether long-term customer contracts can cover the cost of servers, electricity and new facilities. Higher interest rates make debt-funded construction more expensive and can reduce the cash available for expansion.

JPMorgan has defended CoreWeave’s contract returns despite those concerns. However, the bank expects the company to continue spending more cash than it generates until 2030, according to its assessment.

KOSPI Falls as Brent Crude Tops $111

South Korea’s KOSPI dropped 3.73% to 5,552.74. Samsung Electronics lost 2.98%, while SK Hynix declined 4.23%. Both companies supply memory chips used in artificial intelligence systems.

Energy markets added another source of pressure. Brent crude moved above $111 a barrel, as reports of attacks on Gulf shipping and Saudi facilities raised concerns about regional supplies. Saudi authorities had not confirmed some reported strikes.