Cerebras Shares Face Selling Pressure Ahead of 19.4 Million Share Lock-Up Expiration
Cerebras Systems Inc. (CBRS) faces potential selling pressure as up to 19.4 million shares become eligible for sale on Wednesday under the artificial intelligence chipmaker's staggered initial public offering lock-up schedule. The stock hit a record low close of $146.62 on Monday and currently trades at $147.80, well below its $185 IPO price and its $350 opening price from May.
The upcoming share release represents about 8% of the company's outstanding stock, mirroring a similar unlock on Sept. 30 that was followed by an 8.9% single-day drop in share price. Ahead of this release, key insiders including Chief Executive Officer Andrew Feldman and Chief Technology Officer Sean Lie sold over $240 million in Class A shares between Aug. 20 and Sept. 25 under pre-established trading plans.
Beyond internal share releases, the company faces external headwinds, including questions regarding hardware deployment for key customer OpenAI and growing competition from cloud providers like Microsoft Corp. (MSFT) developing in-house inference processors. Investors will watch how the market absorbs the new share supply and whether demand holds for the firm's specialized chips.
Key points
- Up to 19.4 million Cerebras shares unlock for potential sale on Wednesday.
- The stock hit a record closing low of $146.62 on Monday and trades below its $185 IPO price.
- Company insiders sold more than $240 million in shares between late August and late September.
- Cerebras holds a multiyear deal exceeding $20 billion to supply computing power to OpenAI.
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How we writeDisclaimerQuestions and answers
When do Cerebras shares unlock after its IPO?
Up to 19.4 million Cerebras shares become eligible for sale on Wednesday as part of the company's staggered lock-up schedule.
How many shares are releasing in the Cerebras lock-up expiry?
The upcoming release includes up to 19.4 million shares, which represents approximately 8% of the company's total outstanding shares.
What is the agreement between Cerebras and OpenAI?
Cerebras has a multiyear contract worth over $20 billion to supply OpenAI with 750 megawatts of computing power, while OpenAI holds warrants for up to 33.4 million shares.