The momentum behind Firmus Technologies’ high-flying valuation is showing severe cracks just weeks out from its anticipated ASX debut. Multiple sources briefed on the matter told Guardian Australia that the AI datacentre company is slashing its valuation to entice sceptical investors or may even shelve its initial public offering altogether.
Withdrawal from Parliamentary Inquiry
On Thursday, Firmus abruptly withdrew from its scheduled appearance at a parliamentary inquiry into artificial intelligence amid harried discussions to save what was billed as the largest IPO in Australia in decades. Most of the alarm bells about Firmus have been centred on its near $44 billion valuation for a company still in its start-up phase.
Repricing Concerns
Its backers were confident of obtaining this valuation just days ago, but are now frantically re-pricing to find a level that investors will be comfortable paying ahead of an anticipated ASX listing late this month.
““The whole thing was getting fanciful,” said one investment manager briefed on the float. “It’s a business that’s losing hundreds of millions of dollars, and yet its valuation kept going up nonstop every couple of months.”
Rapid Valuation Increase
In the lead-up to its anticipated listing, Firmus raised money from large investors, including chip maker Nvidia, and Wall Street firms Blackstone, Jane Street, and Coatue. Just over a year ago, Firmus was worth less than $2 billion, according to the value placed on it by Nvidia and others as they took equity stakes. In just over a year, successive capital raising by many of the same core investors drove Firmus’s valuation from $1.85 billion to $15 billion about eight weeks ago. That increased to almost $44 billion just days ago, although that figure is being heavily unwound due to tepid support.
