US$5 billion Firmus IPO divides investors after valuation triples in two months
Investors scrutinise data centre operator’s project pipeline, debt burden
Firmus, an Australian data centre operator, is set to launch a US$5 billion initial public offering, becoming the country's second-largest ever IPO. The firm's valuation has surged nearly threefold in just two months, reaching US$30.6 billion following its recent A$11 share price. This sudden valuation increase has raised concerns among potential investors, who question whether Firmus can meet its ambitious growth projections.
The company estimates that its planned and existing data centres will generate US$5 billion in annual earnings within five years, but its US$30 billion debt burden and valuation have been flagged as red flags. Merlon Capital Partners' Kirit Hara stated that the firm's process does not allow them to buy into the company's "hopes and dreams," while Katana Asset Management's Romano Sala Tenna expressed uncertainty about whether to participate in the IPO, citing the "enormous amount of execution required to justify the valuation."
Despite the polarizing sentiment, indicative orders for the IPO have already surpassed the deal's size, with the stock scheduled to begin trading on the Australian Securities Exchange on October 23.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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