CRWV cannot profitably build data centers at a 15% debt yield, as the equity return needed is usually higher; its 2031 debt yield rose from about 8% in May to over 15%. Capital-intensive with capex not covered by cash flow, it must raise capital; if capital is too costly and ROIC too low, it gets into big trouble.

The companies I'm talking about are cloud startups like CoreWeave, Nebius, and Iren.

We have Nepos down by about 19%, then Ion and Korweef down by about 22% during that period.

This is the debt of " Corowave" with 9% interest due in February 2031. In May, this debt was trading at a yield of approximately 8%. Earlier this week, its yield had exceeded 15%.

I don't think there's any way Korwef can profitably build these data centers with a 15% debt yield, because the yield you need to achieve on equity is usually higher than that.

Korwef, Nebius, Iron, and Oracle are now capital-intensive companies. If this capital expenditure cannot be covered by the company’s cash flows, which is not currently possible, then you must go out and raise capital .

If this capital is so expensive that the development is ultimately not profitable, and the returns you will get, i.e., the return on invested capital, are not high enough to justify the cost of this money, then this is how companies get into big trouble.