Australian artificial intelligence data center developer Firmus is weighing a reduction in its planned initial public offering price from $11 to $9 per share, with market sources indicating the company may pull its Australian Securities Exchange listing entirely. The potential price cut follows weaker-than-expected interest from international and domestic wholesale investors, threatening what was positioned to be one of the largest floats in ASX history.
Valuation Trims and Listing Uncertainty
Reducing the offer price to $9 per share represents an 18.2% discount on the original target, lowering the company's prospective market capitalization from $43.7 billion to approximately $35.8 billion. Reports from market sources suggest the valuation could drop as low as $30 billion if the listing proceeds, reducing total funds raised by roughly $1.3 billion. Local retail brokers reported light demand during initial bidding, prompting advisers to consider fee cuts while lobbying major offshore investors.
The uncertainty surrounding the listing coincides with Firmus abruptly withdrawing from a scheduled appearance before Australia's federal parliamentary inquiry into AI without stating a reason.
Reliance on Strategic Backers
The float's success now hinges significantly on key existing investor Nvidia, with advisers reportedly seeking additional financial support from the chipmaker. Just two months prior to the IPO attempt, Nvidia, Coatue, Blackstone, and Jane Street invested $2.85 billion in Firmus at a $15 billion valuation. Even at a reduced $30 billion market cap, the listing would still double the company's previous private valuation.
However, corporate friction has surfaced alongside the financial pressure. Firmus and data center provider CDC mutually dissolved their joint Southgate data center project partnership earlier this year after executive leadership cited misalignment between the two firms.
Data Center Expansion Challenges
A reduced capital raise complicates Firmus's capital-intensive buildout plans. Out of its planned $7.1 billion raise, Firmus earmarked $3.46 billion for servers, $929 million for deployment infrastructure, $2.21 billion for financing costs and liquidity reserves, and $271 million for working capital.
Firmus currently operates 46 megawatts of operational capacity across Melbourne and Singapore, representing 3% of its total projected target. The company aims to construct an additional 865 megawatts across five locations in Australia and Asia over the next two years, estimated to cost $51.71 billion. Securing remaining build funds for facilities in Tasmania, Malaysia, and Indonesia presents an elevated challenge if public market support remains subdued.
AI-generated editorial illustration; not a documentary photograph.
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