Dec 12 (Reuters) – Shares of Fermi plunged 40% on Friday after the data center real estate investment company said a prospective tenant had terminated a deal to help fund construction at its Texas site, dealing a setback to the newly listed firm.
Under the terms of the agreement, the undisclosed customer would have leased part of Fermi’s Project Matador site in Texas and could provide up to $150 million to help finance construction.
While both sides remain in discussions over a potential lease, the funding agreement has been scrapped.
The move could mark an early challenge to Fermi, a company co-founded by former U.S. Energy Secretary Rick Perry, which started trading in October at a valuation of $14.8 billion but is yet to bring in revenue.
Fermi rode strong AI-driven demand to a robust IPO in October as investors piled into companies providing the infrastructure necessary for the technology.
But the latest setback for the company, which is less than a year old, comes at a time when it is navigating a more cautious backdrop for AI as some investors question how long the sector’s rally can continue without clearer profit paths.
The stock was last trading at $9.08, 57% lower than its initial public offering price of $21.
(Reporting by Niket Nishant in Bengaluru; Editing by Anil D’Silva)
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