Firmus, an Nvidia-backed AI data-centre company, is trying to salvage a share float that would be the second largest in Australian history after Telstra in 1997. The ABC reported on Thursday that the float was in doubt as investors got cold feet. The AFR said bankers began price talks on Wednesday after weak overseas demand and were trying to shrink an offer first reported at $7.9 billion. Reuters had earlier reported an
The float was meant to be the proof that Australian investors will fund the AI build-out. If the price falls by almost a third, it tells investors what the market thinks of the sector, and it hits the contractors and landlords who have tied their plans to Firmus.
If you own an index fund or an industry super fund, you would have held some Firmus through the listing. At the lower price you would own more for the same money. Nothing changes until it lists.
Investors are right to demand a lower price for a company that has built only a small part of its promised capacity and is loss-making.
Cutting the price in a rate-rising market is the market working; the business remains one of the few Australian companies positioned to host large AI workloads.
Watch for an ASX or company notice. The price, the size and the date are all provisional, and Thursday's story rests on press reports and market sources. A withdrawal would be news; a smaller float would be a lesson.
ABC News (float in doubt; market blog) · Australian Financial Review (price talks, Maas Group, escrow) · Sydney Morning Herald · The Guardian · NZ Herald and Startup Fortune (price cut reports) · Bloomberg quote (ASX close) · Reuters via earlier coverage (Oct. 6–8) · Revised price and valuation not confirmed by the company
Firmus scrambles to save Australia's second-biggest share float as investors balk. The ASX falls 0.8%
The AI data-centre company has reportedly cut its price from $11 to $8.25 as the book closes early, and some reports say the float could be pulled. The sharemarket lost 66.8 points as oil jumped on Iran tensions.
Firmus, the Nvidia-backed AI data-centre company, spent Thursday trying to rescue what would be the second-largest share float in Australian history behind Telstra's in 1997. The ABC reported that the nation's second-largest ASX float was in doubt as investors got cold feet, and that the company was trying to save the offer as interest underwhelmed. The Australian Financial Review said the banking syndicate began price talks on Wednesday after overseas demand came in weaker than expected, and that the bankers were trying to shrink an offer first reported at $7.9 billion. The Sydney Morning Herald wrote that investors did not buy the hype, and the Guardian said the high-flying valuation may be coming back down to earth.
The numbers are moving, and the reports differ. Reuters had earlier reported an $11 price and a raise near $7.1 billion, valuing Firmus at about $44 billion. By Thursday several outlets, including the New Zealand Herald, reported that the price had been cut to $8.25 and that the book had closed a day early, which would cut the valuation by roughly 30 per cent to about $30 billion. The New Zealand Herald said the float could be pulled altogether. We saw no announcement of a withdrawal or a revised timetable by evening, and the ABC noted the company did not appear on the exchange's list of upcoming floats. We therefore treat the revised price as reported, not confirmed.
The AFR kept up a stream of reports under headlines that included a hedge fund finding 30 red flags, the company pulling down its deal documents, bankers' emails that raise serious questions, and a 36-hour spiral of doom. The paper also reported that Maas Group, which has about $1.2 billion of AI contracts linked to the float, was exposed, and its shares fell. Investors were said to be worried that about half the book was going to existing holders, that more than half the stock would be freely tradable at listing, and that 42.4 per cent of the register would sit in escrow.
The wider market was weak for other reasons. The S&P/ASX 200 closed down 66.8 points, or 0.77 per cent, at 8,660.9, according to ABC and Bloomberg, with miners hit as oil rose. Brent crude was up about 2 per cent near $102 a barrel on worries about supply as attacks on shipping in the Gulf and the Strait of Hormuz increased. The index is more than 6 per cent below its early-August peak. Lovisa and Weebit Nano were among the worst performers, down 8.7 and 11.0 per cent.
Bond markets added to the nerves. The AFR reported that France had set the bond market on fire again, warned that artificial-intelligence debt raisings increase the risk, and said a sudden wobble in AI debt had arrived at the wrong time for Firmus. A company that needs cheap capital to build data centres is sensitive to exactly that.