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Seven years ago, an Australian company called Firmus was founded working in the data centre (microchip hardware) space. Later this month, it’s set to launch an IPO and list on the ASX.
It’s probable its founders couldn’t have foreseen what the introduction of ChatGPT would mean for stock markets globally, but it was very good timing.
The Australian company is looking for $7B to list on the ASX, which would be the second-ever-largest IPO after Telstra. It now refers to its data centres as ‘AI factories,’ because of course it does, but the company’s got big names it works with.
Among those big names are NVIDIA and OpenAI, and Firmus has also put it out there that it reckons it can make US$12B in the first twelve months of its listing on the Australian stock market.
Those are big claims, but if they can pull off what the other tech giants are pulling off in America, it means the ASX would have a real bonafide AI stock. It would also probably leave Wisetech in the dust, and local tech investors will probably be glad to have something else to talk about.
Of course, the decision to list on the ASX is perhaps curious – why not just go to the US instead? Perhaps a point of national pride, perhaps not, but it will be an interesting test for the ASX itself to see how the Firmus IPO goes.
(Sunrise Energy Metals, one of the hottest local stocks this year, today announced it’s moving to the US proper.)
The IPO does have its critics, and its bulls in roughly equal measure. Australian trading legend Marcus Padley, speaking as his firm, has described the IPO as “hyped.”
In fact, via Marcustoday, Padley are referring to it as an ‘Australian SpaceX’ with a float price up to 40% overvalued.
This finance journalist is also aware of one former stockbroker who described it as a “[Guzman y Gomez] situation.” That said, Guzman has quite successfully bounced back from its record $15/sh lows in April of this year.
Others, including fund managers, realise the IPO’s reception is hard to divine but that it’s probably too good an opportunity to miss. Others still intend to see how it goes and see how many data centre sites they bring online.
The valuation assumes a successful transition towards being a globally-exposed data centre giant, which so far, isn’t the case. But it wouldn’t be the first company to list on the ASX with plans of global domination – which is where the GYG similarity comes from.
What happens is, ultimately, unknowable. Everybody seems to agree on one thing about Firmus’ IPO however – for regular investors, it’ll be expensive.
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