Nvidia-backed Firmus scraps Australia's biggest planned IPO since 1997
Australian AI data center firm Firmus pulled its stock market listing Friday after investors balked at its price. The retreat is a warning sign for the money pouring into AI buildings, including retirement funds that passed on the deal. The float would have valued Firmus at about A$44 billion, the biggest Australian debut since Telstra in 1997.
Firmus Technologies has scrapped what was set to be Australia's biggest stock listing in decades. The Nvidia-backed company builds liquid-cooled data centers it calls "AI factories." Its clients include OpenAI and Meta, the BBC reported.
The company blamed "recent market volatility and prevailing market conditions." Its board decided that going ahead was not in shareholders' best interests. "Firmus will now pursue capital from the private markets and consider alternative public and private market options," a spokesperson said.
The offer priced shares at A$11 each and valued Firmus at about A$44 billion, The Guardian reported. That would have been the largest debut on the Australian exchange since the telecom giant Telstra in 1997. Listing was planned for Oct. 23.
Demand never showed up. One of Australia's biggest pension funds, UniSuper, chose not to buy. "We think that Firmus indeed has a compelling story. It just doesn't have a compelling valuation," chief investment officer John Pearce said. He also worried Firmus would need to borrow more to grow.
The fallout spread. Shares in Maas Group, a Firmus investor, plunged more than 20% on Thursday, The Guardian reported. Big investors have begun blaming the banks that ran the float for misleading them, the Australian Financial Review reported.
The timing is rough for AI. The decision landed a day after U.S. tech stocks fell on a report that OpenAI's revenue was lower than believed. Backers of Firmus include Nvidia, Blackstone and Jane Street.
The company has had other setbacks. This week, data center firm CDC ended a joint project with Firmus that had been touted as a A$73 billion deal. A CDC executive told a parliamentary committee on Friday that the two companies' missions had diverged.
Australia remains a hot spot for data centers, with more than 160 already operating, the BBC reported. Cheap land and clean energy help draw them.
What we know: Firmus withdrew its IPO, citing market conditions.
What we don't: How and where the company will raise money next.
Where outlets agree The BBC and The Guardian both quote Firmus saying it will now pursue capital from private markets and consider other public and private options.
Where they differ The Guardian says Firmus sought to raise A$7 billion, while the Australian Financial Review puts the planned raise at US$5.5 billion, or A$7.9 billion.