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After much hubbub, the planned IPO that AI (hopeful) giant Firmus had set for the ASX is no more.
On Thursday, reports indicated that brokers were looking to perhaps re-spin the Firmus float at a lower valuation and cheaper price-per-share; only twenty four hours later, the IPO has been withdrawn completely.
The issue for most investors is that Firmus was fairly light on details in its prospectus.
It has deals with NVIDIA and OpenAI, it wants to move into data centres, it reckons it can cool down data centres in such a way that uses less water – all promising things in this AI age, but even in a world and industry where disbelief feels permanently suspended, Firmus just wasn’t taking it seriously enough.
What’s been particularly noted is that there was a lack of interest from offshore investors, who not only would have been concerned by Firmus’s lack of detail in its prospectus, but also surely asked themselves: why, exactly, is an AI giant listing on the ASX?
Wall Street has more liquidity, more traders with more money, and the existing NASDAQ tech index.
While market volatility on the back of the Iran war has led to higher bond yields which is making other companies withdraw IPOs, at the end of the day, it’s Wall Street – and it’s a world away from the ASX.
The ASX is known for mining stocks, a handful of biotech stocks, and one particularly expensive bank. And that’s well and good, but it’s the wrong kind of place to try and list an Australian SpaceX.
(Speaking of SpaceX – that trillion dollar spectacle has recently seen its share price hit US$160/sh – exactly where it floated in early June.)
But perhaps it’s a good thing that we didn’t get Firmus, because if it hit the market valued at $44B, assuming it was going to be considered a technology company, it would have had an outsized influence on the XTX (tech sector).
Australia’s tech sector – if you choose to believe we truly have one – has been a point of pain in recent history, with returns down -33% YoY. If Firmus had listed and done a SpaceX, that could have looked a lot worse.
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