Firmus pulls its $7 billion Australian listing as doubts grow

A $7 billion offer without enough buyers

Firmus said its board concluded that the listing was no longer in the interests of the company and its shareholders. A representative said on Friday morning that it would seek capital in private markets and consider other private and public options.

By midweek, the company’s carefully prepared investor presentation was losing force. Bankers had overestimated demand, according to one investment manager briefed on the discussions. That prompted talk of a substantial cut to the proposed $11 share price; Firmus ultimately pulled its listing application altogether.

The company has backing from Nvidia, Blackstone, Jane Street and Coatue, and had planned to bring in five brokers for the offering. But Firmus is still early in its development, with only two small sites in operation. The gap between a $7 billion fundraising target and that limited operating footprint is central to why investors questioned its valuation and revenue outlook.

The fallout reaches beyond Firmus

The withdrawal also puts pressure on existing investors and prospective public-market buyers.

Private capital is the next test

Firmus now has to find private investors to finance data-center construction in Australia and other parts of Asia. I think the more important test is not whether it can attract capital somewhere, but whether private investors will accept a valuation and timetable that public-market buyers would not.

The announcement says little about what terms Firmus might accept in a private raise, or how much of its planned expansion it can fund without the listing. That leaves the company with a narrower route to finance its buildout: it can seek new private backing, but it has not yet shown that the scale of its ambitions matches the business operating today.