Elice Group stock tumbled 32% when it began trading in Seoul on Tuesday, and U.S. data center stocks fell in premarket trading.
At 8:08 a.m. ET, CoreWeave stock was down 4% before the market opened. Shares of Nebius and Iren each fell about 5%, and Vertiv stock slid 2%.
Elice is a South Korean firm that offers AI cloud services, plus education and business software built on AI. It ended the session at 60,500 won, below its 90,500 won IPO price, for a market capitalization of about 674 billion won. The company raised 201.1 billion won ($150 million) in the offering and intends to direct the bulk of that money toward portable, modular data centers and supporting infrastructure, according to Reuters.
Investors are becoming more cautious about providers of AI-focused computing capacity because they fear there is too much of it, according to CNBC. The KOSPI fell 3.73% on Tuesday, and the Elice debut contributed to the decline. The index closed at its lowest level since April 7, according to Reuters.
HSBC had flagged problems for CoreWeave before Tuesday's moves. "Debt market woes and moderating LLM revenues are exacerbating structural concerns for neoclouds," HSBC analyst Abhishek Shukla wrote in a Monday note, according to CNBC.
Elice set its IPO price on Oct. 6, ahead of the recent slump in AI-related shares, analysts said, according to Reuters. The offering attracted institutional demand equal to 388.84 times the number of shares on sale. “The conclusion is simple: the timing is bad,” Swissquote Bank analyst Ipek Ozkardeskaya said, according to Reuters.
Other AI-related deals have also run into trouble, according to Reuters. Australia's Firmus shelved its IPO, while AirTrunk put off a REIT listing in Singapore and SoftBank's SB Energy pushed back a stock sale in the U.S.
CoreWeave stock was already under pressure last week. It fell 15.5% on Oct. 14 as an AI-stock selloff and a higher inflation reading weighed on the market. The company's debt had dropped to levels usually associated with financial distress.
British AI infrastructure firm Nscale is also preparing a listing. It is seeking up to $3 billion in an IPO that could happen as early as this month, after Microsoft $MSFT backed out of a lease at its Loughton data center.
Daily Brief
The essential business news, delivered fresh every morning.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.