Three Days From Open Book To Withdrawal
Firmus, an Nvidia-backed data centre builder, withdrew its application to list on the Australian Securities Exchange on Friday 9 October, days after opening its book at A$11 a share.
Forbes Australia says the book opened on Tuesday 6 October with the aim of closing on Friday 9 October. The ABC reported on 8 October that investment banks had stopped taking bids on a listing scheduled for 23 October, and Reuters says indicative orders were pulled from Wednesday. SmartCompany reported that Firmus was likely to cut the price to A$9, which would have trimmed the raise by about A$1.3 billion.
| Item | Figure | Reported by |
|---|---|---|
| Offer price | A$11 per share | Reuters, Forbes Australia |
| Equity value at that price | US$30.6 billion | Reuters |
| Valuation in the early August round | US$10.5 billion | Reuters |
| Planned raise | About US$5 billion | Reuters |
| Price cut discussed | A$9 per share, about A$1.3 billion less raised | SmartCompany |
| Planned listing date | 23 October | ABC |
| Expected debt once built | About US$30 billion, roughly six times forecast 2028 operating earnings of US$5 billion | ABC |
| Capacity | 46 MW operating, 865 MW under development | Forbes Australia |
Firmus said its board concluded that the offer terms did not reflect the strength of the business and that proceeding was not in the best interests of the company and its shareholders. It will now pursue capital from the private markets and consider other public and private options, and Reuters reports no size or terms for a private round.
Why Investors Said No
The coverage points to a cluster of worries: a steep valuation jump, a short operating record, heavy borrowing and dependence on a few large customers.
Reuters says the company had only two operating centres and no track record of building AI data centres, and that investors were uneasy about escrow terms that would let existing holders sell more than half the stock from day one. SmartCompany puts the 46 MW in operation at about 3 percent of Firmus's pledged ambitions, and a Ten Cap portfolio manager told the ABC that 97 percent of the promised capacity has not been built.
Maxence Visseau of Arkevium Capital said, as PYMNTS relayed from Bloomberg, that investors still believe in AI but will not pay any price for companies that spend huge sums on data centres, depend on a few big customers and promise profits years away. The valuation rests on building data centres across Asia for clients including Meta and OpenAI, according to PYMNTS, and Forbes Australia names OpenAI as anchor customer of two Malaysian facilities. Morningstar's Lochlan Halloway told the ABC that "The neoclouds are heavily geared".
Fund manager Roger Montgomery asked in the ABC why the price would be cut if, as investors had been told, indicative orders exceeded the offer size at A$11. SmartCompany's breakdown of the use of proceeds adds a detail: of the 7.1 billion raise it printed, 2.21 billion, or 31 percent, was earmarked for a liquidity reserve and financing costs, against 3.46 billion for servers.
What A Renter Of AI Capacity Should Take From It
A provider that builds capacity ahead of customer payments depends on its next raise, and Firmus shows how quickly that raise can close.
Ask how much of the capacity you rent is built and energised today and how much is promised, because Firmus had 46 MW running against 865 MW under development. Ask how its debt compares with its earnings, how many customers carry it and whether you are one of two or three, and what happens to your workloads and data if a financing round fails.
In the contract, avoid large prepayments before capacity is delivered, tie payments to delivery milestones, and keep an exit path to a second provider. The same questions apply to any European or British provider building GPU capacity, and this story names none.
Nothing here is investment advice or a view on any company's shares.
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