Nvidia-Supported Firmus Abandons $5B Australian IPO Due to Low Demand

Australian AI data centre operator, Firmus, supported by tech giant Nvidia, has abruptly cancelled its planned $5 billion initial public offering (IPO) on the Australian Securities Exchange (ASX). The decision was made in light of recent market volatility and tepid investor interest.

Originally, the company intended to sell shares at A$11 each, which would have given it an equity valuation of $30.6 billion. This valuation is nearly triple the $10.5 billion valuation it achieved following a fundraising round in early August. The IPO would have been the second-largest new share sale in Australian history, with plans to raise up to A$7.1 billion. However, investors were deterred by the aggressive pricing, and raised concerns over the company’s debt levels and lack of operational detail.

Firmus, which currently operates only two AI factories — in Melbourne and Singapore — with five more planned across the Asia-Pacific still in early stages, stated that the IPO terms did not accurately reflect the strength of its business and long-term growth outlook. Major superannuation fund UniSuper also publicly opted out of investing in the float.

The failure of the Firmus IPO has sent shockwaves through the market. Shares of Maas Group — which holds a 3.2% stake in Firmus and has $1.2 billion in contracts tied to its data centres — were placed on trading halt. Analysts warn that this high-profile failure casts a shadow over other AI infrastructure IPOs in the pipeline globally.

Source: ABC News Australia | Reuters via Investing.com