CoreWeave's circular AI financing flywheel is starting to unravel and it could be the Lehman Brothers test case; it pays 9.5% on debt with no new funding unless Nvidia backs it, despite real data centers, active revenue and a locked-in client backlog. Bearish play; losing 65 could send it to 59.

Core we remember that's the one we said to fade yesterday that's giving up its gains.

But I think I think honestly what's becoming one of the stocks to watch right now is Coreweave um on the financing and and it's kind of like the story of a lot of these stocks that have gotten so beaten up is that you know it it's the amount of money and the idea that in this AI space that these companies get money from VC funds and then they just give them to each other and it's almost like a little bit of a I don't want to say the word Ponzi scheme because they're creating real things but The way the money is moving around, the flywheel just too circular. Too circular.

And um and it's starting to unravel a little bit and and like if you if people are doing the math, people are doing the math, they're going to look at it and say these companies are overvalued and Cororeweave is the one.

It's like in 2008 Leman Brothers. It's Coree could be the Lehman Brothers. It could be the test case for a bunch of these companies. Um so I don't know. It's not the one I want to be trading, but I definitely want on my watch list.

verse one who's uh who's great on here, great participant said, "Corewee CDs at 1,000. They're defaulting, no doubt." What's that?

You know, they're they're uh the bonds were going at like 9 and a half% yesterday. So, they're paying 9 and a half on their debt, which is huge, obviously. Um, again, if they don't get Nvidia to stop backs stop them, it's a it's a problem if it's going to be because no one's going to give them money now.

Um, and they don't they don't make enough. I mean, they've also got no they've got a backlog of clients and they're all locked in that the clients have to pay even if they don't take the space.

But Oh, so so that's good for them. Yeah. Oh, yeah. And there are some things with Kore that are real. They do have active data centers. They do have active revenue. Um it's just that they're trying to you know increase that 10 20 30 different times.

Um you know but they they have those things and they've done it pretty well and they have the contract the connection to Nvidia.

BJM the second. Yeah, stick a fork in them. Neoclouds will be the first to tumble. They're basically just carrying debt for other players. Edwin, yes, I think you're right. I know I'm not allowed to use the thing with the air with soap around it, but this sure looks like it.

If they Jason, if they fail, the video looks really bad and the whole sector will take a hit. And we Dutch have the phrase baked air for these valuations.

so okay. Yeah. All right. The key is going to be figuring out which ones are the ones going to fail if it's going to be coreweave before it happens.

I do think Cororeweave Coravee is interesting. Cororeweave is really interesting in terms of a bearish play. I might buy puts on Cororeweave.

Yeah, first time it gets knocked down I would be you know it might give you one one attempted move to the upside. So, I mean, how fast and how furious has this come down? That's a three-day chart. Let's look at uh one month chart. Ugly.

maybe maybe uh yeah, failure at 6730 for me would be a problem. If it tries to move, gets to 6730 or so and rejects, watch out,

it would be like the same thing in core. I don't want to try to trade it out of the gate. No. But if it tries to rally and fails, that's where it could become a fun trade.

And I think that's really true for Core Weef and I think it's also true for Netflix. Those formations are really going to be important to see. So right now we're underneath the closing candle formation.

And so that's continued weakness. So the first drift is into the next important candle which is right here in terms of price at 65. So if we come into 65 and bounce but we can't get above 6750 or so, there's more downside there.

Um so I guess with coreweave with coreweave what's that number give us the number what's the around the number that we want to watch on the upside and downside to see the battles taking place.

Okay so the big battle today is going to be whether we can get above 6750. Okay, that's for buyers will start to come in and say, "All right, let's see if we can push this higher if it gets above this 6750 6760." If it loses 65,

Cuz I mean, so coreweave 65 is the go. No go line for buying 6750 65. Yeah. If it loses 65, a trip to 59 is not out of the question and it's got negative pressure and it's got uh accumulation that is still negative.

It's still in distribution. So there's I mean bounces feel like they could easily be sell zones here easily.

We we went over TLT, we went over Netflix, we went over we discussed Balanteer, um we have Coree, I think is important, but what what are you going to be watching on the open?

And and I I actually quick quick drop on the open and the queue. So core weave we now we have our levels 6750 65. So that 65 is going to be tested right now. Um 6535. Uh I'm not that was again me just exiting some something I don't want to watch.

Um okay. >> Yeah. Let's see how um >> core weave 65 battle is on Q's 725. I like to just uh below 65. We have core weave below 65 right now. >> Maybe we get that snapback right above it.

We'll see. But people do not want >> and it's got a lot of distribution. And so that's really that's important thing.

>> I bought calls and coreweave >> all right >> see on the back above 65 bought the 67 calls for 57 cents see if it holds 65 I also own the 61 puts >> so like I'm just looking for a gap big gap either way.

>> Yeah. So, got accumulation. I mean, there's more buying than selling here on this dip down. So, I think that's a good space for you to take a peek at and and say, "Hey, let's see how it goes."

How do you measure where you put your stop? >> I don't because I'm buying options for 50 cents. So, >> so it's all or none. >> Well, it's moves too fast. By the time I realize I'm wrong, it would be worth like 15 or 20 cents.

So, it's like a 30 cent risk on the trade. >> Okay? >> You know, that's why I'm buying the out of the money options because I want the low risk. I'm just looking for >> an extreme move one way or another.

Uh if I was going more at the money, then I would have to use stops. But like these things move so fast, it's tough. >> Um >> yeah, >> but that 65 level is is certainly the >> Yeah, they're fighting there.

They certainly are fighting there. Fighting there.

Um, I'm stuck in the not stuck. I'm I'm more in my like just started watching Core Weave, so I'm kind of >> just stay with that one because I can't watch two of these at the same time.

>> I like that level you gave out on core. >> That 65. >> Yeah. >> Yeah. That's a good one to watch.

SpaceX looking like it wants to bounce. So, core battles at 65 on still great call there.

Um but I didn't get out of all of them.

I guess with coreweave, I guess it's just is it that logical like, okay, we think they're going bankrupt, so let's get shorted and it's just going to go down. It's never that easy.

No, because there's somebody on the other side that is saying, "No, you know what? I'm going to I'm going to buy that." Remember, if everybody thought that this thing was going to go out of business, it'd have no bid, right?

It'd have no bid. But it does have a bid because people are thinking, "No, this has come back enough."

Tess said to your point, Corweave bought uh Kathy Woods bought Corweave this week. Yeah. and you know she's a conviction gal and her stocks did rotate to the upside after a really bad draw down but I mean how are you going to handle that pain people don't want to handle that kind of pain in a portfolio they just don't they can't they they are physically unable to do it unless you just shut it down and don't look at it for years