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The data-center provider’s terrible six-week slide picked up speed when a famous short seller piled concerns on top of delays

CoreWeave CRWV -7.94%decrease; red down pointing triangle, the largest of a new breed of companies driving the artificial-intelligence boom, has watched $33 billion of value vaporize in six weeks.

The share-price plunge of 46% comes as investors worry about a possible AI bubble, the fallout from a failed merger and public criticism from high-profile short seller Jim Chanos, known for predicting the collapse of Enron.

But some of the high-tech company’s biggest problems began with a very low-tech nuisance: unexpectedly turbulent rainstorms in North Texas.

Over the summer, heavy rains and winds caused a roughly 60-day delay at a construction site in Denton, a small city north of Dallas, preventing contractors from pouring concrete for a major AI data-center complex, according to people familiar with the matter.

As a result, the completion date for the huge data-center cluster, consisting of about 260 megawatts of computing power that CoreWeave plans to lease to OpenAI, has been pushed back several months. There were additional delays caused by revisions to design plans for some of the data centers a partner is building for CoreWeave in Texas and elsewhere, according to filings.

The slowdown was compounded by mixed messaging from CoreWeave’s chief executive, Michael Intrator, which spooked investors and accelerated the company’s share-price decline at a particularly vulnerable moment for the AI trade.

CoreWeave’s business model involves using high-interest debt to buy thousands of advanced AI chips from Nvidia, installing them in server racks inside data centers that it leases from third-party landlords, then renting access to the chips to AI companies.

As capital spending on AI infrastructure has intensified, CoreWeave, which is 7% owned by Nvidia and backed by hedge funds such as Magnetar Capital and Coatue Management, has become the standard-bearer for both the promise and the risk of the AI boom.

Some critics point to the high levels of debt it has taken on to finance its data-center build-out, while others worry that the company depends on just a handful of large customers, such as OpenAI, Microsoft and Meta, for the bulk of its revenue. CoreWeave saw sales more than double in the most recent quarter to nearly $1.4 billion, from $583 million a year earlier, but the company is unprofitable and lost $110 million in its most recent quarter.

In early November, before the construction delays were widely discussed, Intrator played down fears of an AI bubble at a Wall Street Journal event in Northern California.

“If you’re building something that accelerates the economy and has fundamental value to the world, the world will find ways to finance an enormous amount of business,” he said, adding that the high number of buyers of data-center computing services had convinced him that there is not a bubble inflating.

One of those major buyers is OpenAI, the company behind popular AI models ChatGPT and Sora. CoreWeave plans to rent the chips at its Denton data-center cluster to OpenAI once it is built. The builder is Core Scientific, a former crypto-mining company based in Austin that has emerged as one of CoreWeave’s biggest landlords.

On Nov. 10, Intrator spoke to investors during a quarterly earnings call and delivered a confusing, contradictory message about the construction problems.

At one point in the call, he attempted to quash a string of questions about the delays and their impact. “There was a problem at one data center that’s impacting us, but there are 32 data centers in our portfolio, all of them are progressing to one extent or another,” he said.

He said that “this one data center will catch up, and then we will move forward from there.” That statement was inaccurate, however, and Intrator’s chief financial officer, Nitin Agrawal, quickly corrected the CEO and said that the delays were concentrated at “one data-center provider,” rather than just one singular data center, suggesting a more widespread problem.

At another point, Intrator described construction delays as “systemic challenges” that are “very frustrating for our clients,” and said the company was trying to diversify its supply base of data-center builders to soften the impact of inevitable delays.

The comments unnerved investors. The next day, Intrator gave an interview to CNBC’s Jim Cramer, once again repeating the “one data center” message before correcting himself after being prompted by the host. CoreWeave’s stock, which hit $105.61 the day of its earnings report, fell by 16.3%, closing at $88.39. The skid has continued into December.

CoreWeave’s gyrations highlight an issue that affects the entire AI industry: The rapid pace of growth has raised questions about how and when major capital investments are going to produce healthy profits. They also underscore the intensity of the frantic rush to build enough computing infrastructure to satisfy demand.

Billionaire Elon Musk has been roaring ahead with construction of a data center and energy project known as Colossus, built on 114 acres of swampland in western Tennessee, that’s set to house 200,000 Nvidia chips meant to power models made by his xAI startup, including Grok. Rivals across the AI chips industry are taking on Nvidia for a chance at a piece of the AI computing pie, citing “insatiable demand” for chips, data centers and power.

At the same time, concerns are mounting around the promised timelines for building out computing capacity across the industry, with construction delays and supply-chain bottlenecks threatening to push back hundreds of billions of dollars’ worth of spending already priced into valuations. Shares in cloud provider Oracle and custom-chip designer Broadcom are both down by double-digit percentages after they said some spending would come later than investors had hoped in recent quarterly earnings reports.

In late October, Core Scientific shareholders voted overwhelmingly to reject a $9 billion takeover attempt by CoreWeave after hedge fund Two Seas Capital, the landlord’s biggest active shareholder, publicly opposed the merger, writing in a letter that if the deal went through, Core Scientific’s shareholders would be “exposed to the high volatility of CoreWeave’s share price” and vulnerable to “substantial economic risk.” CoreWeave’s shares fell more than 6% after the deal fell apart.

Core Scientific has been flagging delays to its collaborations with CoreWeave since at least February, when it reported that it had pushed back certain construction timelines in order to make “design enhancements to further optimize GPU performance.” The company flagged weather-related delays in August.

Another major concern is the financing market for AI infrastructure players such as CoreWeave. Last week, after Oracle reported unexpectedly high capital expenditures on chips, networking equipment and other infrastructure, the bond market convulsed, raising the cost of capital for many large tech companies. CoreWeave’s cost of insuring against default on its debts soared to 7.9 percentage points.

Last week, CoreWeave priced a $2.25 billion convertible bond offering—a type of financing that has a lower interest rate than the asset-backed financing the company typically uses to pay for new data centers, but also comes with a risk of lowering the company’s stock price by diluting shareholders.

Sina Toussi, founder and chief investment officer of Two Seas, the hedge fund that wrote the August letter opposing CoreWeave’s acquisition of Core Scientific, said the deal made sense for CoreWeave, because it would have reduced its borrowing costs for the construction of new data centers, but the structure Intrator offered was deficient and the price undervalued Core Scientific.

“They’re exceptional at getting large workloads up at maximum utilization and replacing underperforming nodes rapidly without interrupting workflow,” said Toussi, whose fund also owns shares in CoreWeave. “But right now the market is concerned about the long-term value of AI.”

Gil Luria, an analyst with D.A. Davidson, said that CoreWeave has the “ugliest balance sheet in technology, by far.” Luria argues that CoreWeave’s operating margins of about 4% are less than half of what the company pays in interest on most of the debt it uses to deploy computing power for customers, making it hard to see how the company will generate profits going forward.

“The bull case is that they’ll scale into it, and that a lot of companies have low margins to start, but this is a company at scale. There is no scaling going on here,” Luria said.

Germany’s Eurex exchange disputes claim that it lets some firms use garbled data to win a tiny speed advantage

High-speed trading firm Mosaic Finance says some of its rivals are unfairly using “corrupted speculative triggering.”

It says the technique gives firms a lucrative 3.2 nanosecond advantage in trading on Eurex, the German futures exchange.

Eurex says the claims are unfounded. It also plans a system upgrade that may curtail the technique.

A millisecond used to be a big deal for the world’s quickest traders. A dispute over huge trading profits at one of the world’s largest futures exchanges shows they now think a million times faster.

The controversy is about an arcane technical maneuver in which high-speed traders bombard Frankfurt-based Eurex with useless data. The idea is to keep their connections to the exchange warm so they can react fractionally faster to market-moving information.

The battle is the latest chapter in a decadeslong contest among secretive ultrafast trading firms, which have pursued a relentless quest for minuscule speed advantages.

A group of high-frequency trading firms has exploited the practice to rake in hundreds of millions of dollars, says Mosaic Finance, a French firm that has complained to Eurex and European regulators.

“An arms race is OK, but you must use legal weapons,” said Hugues Morin, founder of Mosaic.

Eurex says Mosaic’s claims are baseless. At the same time, it recently announced a systems upgrade that is likely to curtail the technique, which other market participants see as falling into a regulatory gray area.

Morin says Mosaic had a thriving high-speed trading business on Eurex until 2022, when its profits suddenly plunged 90%. The Paris-based firm initially couldn’t explain the collapse. After numerous tests, it concluded that rivals were blasting Eurex with bad data to get a tiny but consistent speed edge.

In a complaint filed earlier this month, Mosaic urged the European Commission to investigate Eurex for encouraging the “unfair” practice and allowing a small oligopoly of firms to dominate high-frequency trading on the exchange, according to a copy of the filing reviewed by The Wall Street Journal.

Mosaic claimed that trading firms have made up to 600 million euros, the equivalent of nearly $700 million, by using the maneuver over the past three years, while Eurex has boosted sales by charging such firms for fast data connections.

Eurex, part of Germany’s Deutsche Börse, said it enforces its rules and has tools to detect malformed data.

“The allegations from this individual trading participant are unfounded, and all substantive concerns raised have been repeatedly reviewed by Eurex. None of the issues raised proved to have merit,” a Eurex spokeswoman said. The European Commission declined to comment.

Back in the 2000s, trading firms invested in networks of microwave antennas to zip data more quickly between exchanges, along routes joining hubs such as Chicago and New York. That yielded speed improvements measured in milliseconds—or thousandths of a second.

Now, the battle involves nanoseconds, six orders of magnitude faster. A nanosecond is the time it takes for light to travel about one foot. Obtaining such an edge often involves tiny hacks to optimize automated trading systems.

High-speed traders often seek to capture fleeting differences between prices of related assets, making quick response times critical.

If benchmark Euro Stoxx 50 index futures rise, for example, contracts tied to Germany’s DAX will usually follow. A first mover will be able to buy DAX futures before they tick higher, then sell out at a higher price—a strategy that can add up to big profits over time.

The maneuver that prompted Mosaic’s spat with Eurex can improve reaction times by about 3.2 nanoseconds, according to the French firm, which calls it “corrupted speculative triggering,” or CST for short.

The technique helps because orders on Eurex are encoded into packets, or small bursts of ones and zeros. Under the rules of the Ethernet protocol—widely used in computer networks—each packet starts with a preamble, signaling data is on the way. The real message, such as a buy or sell order, comes later.

A trading firm can save a few nanoseconds by sending the preamble first, before knowing if it wants to trade. If it gets information that makes it want to buy or sell, it can quickly embed its order into the rest of the packet. If it decides to do nothing, the firm can send an empty or deliberately garbled packet to Eurex.

Optiver, a Netherlands-based global trading firm, has also engaged in strategies similar to what Mosaic described, people familiar with the matter said. An Optiver spokesman declined to comment.

Emergent Trading, a small firm in Chicago, also uses a version of the technique to gain several nanoseconds of speed edge on Eurex, said founder Brandon Richardson. He said there is nothing wrong with the technique. It is well-known among high-speed traders and other firms can use it too, he said.

Still, he described cat-and-mouse games with Eurex. He said the exchange once upgraded its monitoring tools, identified what Emergent was doing and told the firm to stop—while other variants of the technique employed by other traders continued to work.

“They could detect my trick, but not other people’s tricks,” Richardson said.

The battleground could soon shift again. On Dec. 8, Eurex announced an overhaul to its monitoring system and other technical changes set to take effect in April, which some traders say could largely end CST. Still, there is little doubt that high-speed traders will keep searching for other ways to get even faster.

Companies such as battery maker CATL earn big margins on export sales despite US tariffs

Shares in Chinese makers of batteries, transformers and other equipment vital for the global build-out of artificial intelligence have rocketed this year, as power-hungry data centres rush to secure alternatives to overstretched legacy grids.

Profits at Chinese companies such as CATL, the world’s largest battery maker, and Sungrow, the world’s second-largest supplier of integrated energy storage systems after Tesla, have soared on the back of domestic and foreign demand.

CATL’s shares are up 45 per cent this year, with Sungrow shares up 130 per cent. They are the two largest companies in the Shenzhen Stock Exchange’s CSI New Energy index, which has risen 38 per cent in 2025.

“Suddenly there’s a scramble for this power equipment,” said Brian Ho, an equity research analyst at Bernstein covering the global energy storage sector.

Neither Chinese company discloses US sales, but official data shows China accounts for the majority of US battery and energy storage system imports.

“China is not only powering China,” said Matty Zhao, co-head of China equity strategy at BofA Global Research. “It’s actually powering the US, Europe and the rest of the world.” 

Despite Donald Trump’s tariffs, it is export sales that are driving profits, as intense competition in China means companies can make bigger margins overseas, Zhao added.

For energy storage systems, which include batteries, DC to AC converters and other equipment, Zhao estimates that profit margins are three to five times greater for exports than for domestic sales. For transformers — vital in data centres to ensure each component gets the right power — sales domestically have 10 to 20 per cent gross margins compared with 40 to 50 per cent for sales to the US and Europe, she said. 

“They would rather continue to export and eat up the tariff,” Zhao said. 

The International Energy Agency forecasts that by 2030 data centres will consume 945 terawatt hours of electricity — more than a fifth of all the electricity currently generated annually in the US — up from about 415 terawatt hours last year. Legacy grids are already coming under strain.

Companies building data centres are turning to banks of batteries and to “micro grids”, which operate independently of conventional grids. The US Department of Energy notes that micro grids are growing quickly and will make up a “significant majority” of US distributed energy resources in the future.

In the first nine months of this year, 60 per cent of US lithium ion battery imports came from China, according to the US Census Bureau, up from 43 per cent in 2020. The total value of such imports was $15bn this year to September, more than three times the value in the whole of 2020.

This comes in spite of US efforts to reduce the country’s dependence on China amid warnings that it is leaving itself vulnerable to supply shocks. The Council on Foreign Relations, a US think-tank, said in an October report that the biggest threats to the US in its race with China to develop AI “stem from supply chains”.

“China and the US have basically not decoupled,” said Raymond Yeung, chief economist for greater China at ANZ. “They’re a single economy of two different jurisdictions.”

Yeung pointed to a “structural advantage” of Chinese manufacturers in the AI supply chain. For example, companies such as CATL are global leaders in producing lithium iron phosphate batteries, which are safer and have longer lifespans than alternatives.

“Despite all these tariffs and the decoupling, the demand for [lithium iron phosphate] batteries is strong,” said Ho at Bernstein, adding that there are “just no other suppliers outside China”. 

Chinese companies also have the advantage of price and speed of delivery.

For transformers, for example, “If you buy from Korea you have to wait two to three years,” said Zhao. “If you have to urgently build out your grid for a data centre, you cannot wait for two years.”

Both CATL and Sungrow have seen foreign revenues surge since 2018, when Donald Trump first raised tariffs on Chinese goods, highlighting the global lack of alternative suppliers.

Power equipment and batteries are part of a broader and largely unacknowledged US dependence on Chinese inputs for AI. US data centre companies use optical transceivers — used to convert electrical signals into light, for transmission, and back again — from Chinese companies such as Zhongji Innolight, as well as printed circuit boards produced in China.

However, current trends may not continue. Next year, the Trump administration plans to raise tariffs on Chinese batteries from 30.9 per cent to 48.4 per cent and to make it harder for equipment with high levels of Chinese content to get federal tax credits.

In a recent note, HSBC said that this year there had been “frontloaded installation in the US ahead of the implementation of the foreign entity of concern requirements on new [energy storage system] projects”.

Companies weigh selling stakes to local groups to compete against fast-moving domestic rivals

Global companies are seeking private equity partners in China to take on their local operations as they grapple with an increasingly competitive local market, a sluggish economy and volatile US-China relations.

The owners of sports retailer Decathlon, ice cream brand Häagen-Dazs, coffee houses Peet’s and Costa, convenience store operator Lawson and GE HealthCare are all weighing options for their China operations, including selling parts or all of their businesses, said people familiar with their thinking.

The rush to rethink China comes amid whiplashing relations with the US, the slowing of the world’s second-largest economy and the rise of fast-moving and better-adapted local rivals across a swath of industries.

The owners of Peet’s and Costa are reviewing options for their China units, though deals under way for their global businesses might shift their priorities, the people said.

“People are realising again that it’s worth it to have a local partner,” said a private equity executive who asked not to be named, arguing that empowered local managers were better placed to make fast decisions to deal with the country’s changing market environment.

The executive added that “many companies’ global boards previously looked at getting out entirely” in 2023 — a low point in US-China relations, when ties were hit by economic strains and differences over the war in Ukraine.

But he said many groups did not do so at the time because of the opportunity cost of leaving the vast Chinese market. “It didn’t really make sense. If you get out of China, why even stay in Asia?”

Today, many foreign-owned companies are downbeat about their prospects and are seeking strategic guidance. The proportion of respondents optimistic about their business outlook hit a historic low of 41 per cent in a survey this September by the American Chamber of Commerce in Shanghai.

Members cited US-China tensions as the biggest challenge to their local operations, followed by increased domestic competition.

“The market is both changing rapidly and hyper-competitive, so it’s a difficult time for foreign brands,” said Frank Tang, chair of FountainVest Partners, which has made working with brands such as Papa John’s and Dairy Queen in China a pillar of its business. “If they don’t adapt, their China business might not be around for long.”

Nimble Chinese challengers have transformed a once highly profitable market into a fiercely competitive battlefield.

Luckin Coffee now operates three times as many China stores as Starbucks, Peet’s and Costa combined, while convenience store chain Meiyijia outnumbers its Japanese rivals by multiples.

Partly in response to such pressures, Starbucks last month agreed to sell 60 per cent of its local business to Hong Kong-based Boyu Capital, while the owner of US fast-food chain Burger King has tapped Beijing-based private equity group CPE to help plot its China expansion.

Starbucks, which is among China’s best-known foreign brands, attracted multiple suitors and secured favourable terms. Boyu agreed to pay $2.4bn and a mid-single-digit percentage of revenue as royalties, said people familiar with the terms.

The two companies said they expected to raise Starbucks’ footprint in China from 8,000 stores to more than 20,000 in the coming years.

Shaun Rein, founder of China Market Research Group, said foreign brands’ problems were compounded by more pessimistic consumers in smaller cities hit by a protracted property slowdown.

Western fast-food brands “are not cheap food destinations for the Chinese consumer”, he said.

General Mills-owned Häagen-Dazs, in the ultra-premium segment, has yet to find the right buyer for its roughly 400 Chinese ice cream shops, which it put up for sale this summer.

Decathlon has drawn only lukewarm interest for a minority stake in its China business, said people familiar with the company’s thinking, while GE HealthCare, with China sales of $2.4bn last year, could be one of the bigger carve-out deals.

Bloomberg previously reported some of the sale processes.

Costa, General Mills, Peet’s and Starbucks did not respond to requests for comment. Decathlon and GE HealthCare declined to comment on what they called market rumours and said they remained committed to China.

Lawson denied there was an active discussion about selling a stake in its business. The company’s co-owner, trading house Mitsubishi Corporation, said “no decisions have been made on this matter at this time”.

Carlyle’s 2017 buyout of McDonald’s China with Citic Group and Trustar Capital is often held up as a model for how private equity can help turn around a Chinese operation. Carlyle put in about $300mn for 28 per cent of the business and sold it back to McDonald’s last year for $1.8bn.

Under Carlyle, the fast-food chain’s China store count more than doubled to 5,500, delivery orders rose to more than 30 per cent of revenue and app users grew from 10mn to 270mn, giving McDonald’s a channel for targeted marketing, according to the private equity group.

Dennis Wang, a partner at Carlyle, said McDonald’s growth in the market had plateaued when the firm came in and reconstituted management to report to an on-the-ground board instead of headquarters, which “made decision-making much simpler and quicker”.

The new owners also helped push through menu changes that headquarters had on its radar but was hesitant to enact because they would diverge from the global menu, Wang said.

For breakfast, they added local favourites such as fried dough sticks and congee and ran chicken product trials to convince headquarters to double down on poultry in China.

“Beef is part of the brand DNA, but when we took over, we said it makes sense to go big on chicken because China is really a chicken market,” Wang said.

An industry insider said the need for localisation was “logically true in any market . . . [but] China is the only one to come up with enough scale to warrant it”.

Wall Street rainmakers scrap for windfall from Warner Bros deal

Clash between Netflix and Paramount for Hollywood studio caps big year for dealmakers

Some of Wall Street’s biggest rainmakers are vying for a windfall as the Paramount-Netflix bidding war for Warner Bros Discovery reaches a climax, capping a blockbuster year for mergers and acquisitions.

Centerview’s Blair Effron, Evercore co-founder Roger Altman and recently appointed Moelis chief executive Navid Mahmoodzadegan are among the bankers advising on one of the hottest deals of 2025.

The skirmish comes after Paramount last week made a $108bn hostile bid, including debt, for the whole of WBD, gatecrashing Netflix’s agreement to buy its studio business and HBO Max streaming service for nearly $83bn.

It bookends a banner year for M&A, with $4.3tn of deals having been struck this year globally, pushing investment banking fees to a near-record high, according to LSEG data.

WBD shareholders expect that Paramount’s hostile approach could mean the price tag of the biggest deal of the year is bumped yet further, potentially delivering hundreds of millions of dollars in fees for the banks involved. 

Bankers are now bracing themselves for a frenzied final stretch of the year, before a December 22 deadline for Warner to opine on which deal it favours. Years of relationship building could hand some advisers a hefty payday and leave others with nothing.

Wall Street heavyweights Goldman Sachs and Morgan Stanley are among those that missed out, having advised Comcast on a competing bid for WBD that was unsuccessful.  

The deal is expected to accelerate through the festive season.

“I’ve missed Christmas Eve and New Year’s and the Fourth of July holidays for deals a lot smaller than this,” said Dwayne Safer, who worked for 10 years in investment banking at Stifel and is now an associate professor of finance at Messiah University. 

The auction process already claimed one holiday, with negotiations coming to a head on Thanksgiving weekend in late November. “When the NBA players play on Christmas Day, nobody says our holidays are ruined. They say isn’t it great you’re in the NBA,” said an adviser involved in the deal. “This is as good as it gets for investment bankers.”

The work of the next few weeks will include strategising how high rival bidders may be able to stretch with their offers, as well as canvassing investors to see which bid they are leaning towards.

The best-placed banks are Allen & Co, Evercore and JPMorgan Chase, which are advising WBD, and have helped chief executive David Zaslav orchestrate an auction process that has forged a deal worth nearly quadruple WBD’s share price last year, when it fell to all-time lows below $8 a share.

JPMorgan advised on WBD’s original plan to split its studio and streaming business from CNN and other television assets, as part of which it mapped out a debt-reduction strategy and provided a $17bn bridge loan.

The slate of advisers helped WBD to contend with an activist investor and guided the company as it shifted its plans from splitting the company’s studio and streaming business from its cable TV division into a wider strategic review which opened the door to a sale, following Paramount’s first bid for WBD in September. 

Boutique bank Moelis tapped into its long-standing relationship with Netflix to win a role as its lead adviser on the WBD sale, as until recently the streaming video company was viewed as an outside contender for the asset, compared with Paramount and the other rival bidder Comcast. 

Netflix, which previously eschewed large dealmaking, used Moelis as adviser on some smaller deals, including its acquisition of visual effects start-up Scanline in 2022. Moelis also advised advertising group Regency on its sale of 32 billboards dotted across Hollywood’s iconic Sunset Strip to the streaming giant.

For Moelis’s Mahmoodzadegan, the role as Netflix’s main adviser stands to be a huge coup in his first year in the position after he took over from the firm’s eponymous founder, Ken Moelis. It would be the third-biggest deal in the boutique bank’s 18-year history, according to Dealogic data, and would likely be one of its biggest-ever paydays.

The frantic rounds of dealmaking have pitted past allies against one another. Moelis was an adviser to David Ellison in his company’s acquisition of Paramount earlier this year, but the billionaire Ellison family recruited Centerview for their WBD bid, so Moelis teamed up with Netflix. 

Wells Fargo, which is better known for its Main Street lending business, is also an adviser to Netflix. Its role in the deal highlights its efforts to deploy its vast balance sheet to win M&A advisory roles.

Wells is stumping up more than half of a $59bn bridge loan to fund the lion’s share of the cash portion of Netflix’s deal. BNP Paribas and HSBC are also financing the loan. 

Wells also nabbed an advisory role on the second-biggest deal of the year — Union Pacific’s $85bn takeover of railroad company Norfolk Southern — also by providing debt financing for that deal. The pacts have boosted Wells’ ranking in announced M&A volume to ninth overall from 16th place a year ago, according to LSEG data. 

Paramount is working with boutique firms Centerview and M Klein & Company, as well as bulge-bracket investment banks Bank of America and Citigroup. BofA, Citi and private capital group Apollo have also committed to providing $54bn in debt financing. RedBird Advisors, one of Paramount’s investors, also has an advisory role, with its co-founder Gerry Cardinale playing a key role in negotiations.

The banks, WBD, Netflix and Paramount declined to comment.

The rainmakers poised for a Warner Bros windfall

In a year of megadeals and blockbuster fees, the frenzied takeover battle for Warner Bros Discovery is the dream series finale for any investment banker.

The sale, set to be the biggest deal announced this year, involves some of Wall Street’s leading rainmakers: Centerview’s Blair Effron, Evercore co-founder Roger Altman and Moelis’s newly-installed chief executive Navid Mahmoodzadegan.

But the cliffhanger to the drama — Paramount last week submitting a $108bn hostile bid for the whole company in an attempt to gatecrash Netflix’s nearly $83bn deal for the studio and streaming assets — means that not everyone will get their fill.

Netflix took pole position over a frenzied Thanksgiving weekend of dealmaking. Now, bankers face having their Christmas holidays claimed as well, as a December 22 deadline for WBD to opine on Paramount’s hostile offer looms.

“When the NBA players play on Christmas Day, nobody says our holidays are ruined. They say isn’t it great you’re in the NBA,” said an adviser involved in the deal. “This is as good as it gets for investment bankers.”

The best-placed banks are those selling WBD — Allen & Co, Evercore and JPMorgan. They have steered WBD from a share price that had sunk below $8 a year ago to a deal valuing the media group at $30 a share and that may yet rise. Centerview and RedBird Advisors are advising Paramount’s rival bid.

For Moelis, the boutique’s role as Netflix’s main adviser marks a major coup for Mahmoodzadegan, who recently took over from the firm’s eponymous founder Ken Moelis.

The deal also is the capstone of a strong year for Well Fargo, the US consumer bank often thought of as an also-ran in investment banking. It is leading a $59bn bridge loan to fund the lion’s share of the cash portion of Netflix’s deal.

This year Wells also nabbed an advisory role on Union Pacific’s $85bn takeover of railroad company Norfolk Southern.

Apollo grows bearish on private credit’s hottest trade

During the 2010s boom in private equity and private credit, one type of deal carried the way, turning relatively unknown firms into industry giants.

For years loans to software companies had been virtually non-existent on Wall Street because banks were unwilling to lend against companies without tangible assets or profits under standard accounting principles. 

Then, in the wake of the 2008 crisis, software was the epicentre of growth for private credit firms as they took a growing share of lending from regulated banks. Many of the largest private credit funds now hold a quarter to a third of their overall assets in software companies.

But one of the world’s largest private capital groups is growing bearish on the sector. 

Apollo is rapidly cutting its exposure to software makers and has shorted software loans, warning of the threat that artificial intelligence poses to software companies, the FT scooped this weekend.

Apollo, with more than $900bn in assets, made bets against the loans of companies, including Internet Brands, SonicWall and Perforce, which are owned by large private investment groups KKR, Francisco Partners and Clearlake, respectively, according to sources briefed on the matter.

Apollo’s short bets in the software sector, which lasted through a large part of 2025, have been closed, said a source briefed on the matter.

The investment group entered 2025 with many of its private credit funds holding roughly 20 per cent exposure to software groups, but it has spent the year cutting its exposure. While Apollo executives believe AI may benefit some companies, they think such directional tech bets are growing in risk. 

“Technology change is going to cause massive dislocation in the credit market,” said CEO Marc Rowan at a recent conference. “I don’t know whether that’s going to be enterprise software, which could […] benefit or be destroyed by this. As a lender, I’m not sure I want to be there to find out.”

DD readers may want to watch this one closely. Private markets have been rocked by technological changes before. Few PE-owned companies survived the death of malls or the yellow pages.