On 9 October 2026, Firmus announced the withdrawal of its application to list on the Australian Securities Exchange (ASX). Just days earlier, the AI infrastructure company had been progressing towards a highly anticipated initial public offering (IPO). As the bookbuild unfolded, valuation, commercial partnerships, financing requirements and execution risks increasingly became the focus of market discussions.
The sequence of events illustrates how investor attention can shift from the growth potential of the AI sector to a more fundamental question: at what price, and with how much exposure to growth that has yet to materialise, are investors prepared to participate?
6 October: Bookbuild Opens as Valuation Takes Centre Stage
According to Reuters and Forbes, Firmus launched its offering at AUD 11 per share, implying an equity valuation of approximately AUD 44 billion, significantly above the valuation established in its previous funding round. Materials released at the launch indicated that expressions of interest were sufficient to cover the offering size. However, indicative demand still needed to be converted into final subscription commitments.
The central point of disagreement in the market was how much future growth had already been priced into the valuation. Firmus presented an attractive expansion outlook, but a substantial proportion of its capacity remained under development. Revenue associated with that capacity would only be realised once the relevant infrastructure became operational.
Investors therefore needed to assess whether construction progress, capital expenditure requirements and actual cash flow generation could support the proposed valuation.
Before and After the Bookbuild: Changes to the CDC Partnership Attract Attention
Around the time of the bookbuild, reports emerged that Firmus and CDC would no longer proceed with their Southgate joint development project, which had originally involved the development of up to 1.6 gigawatts of AI infrastructure capacity.
Firmus told the media that both parties had mutually agreed earlier in the year to discontinue the collaboration. The company maintained that the decision would not affect its existing development plans, contracted customer capacity or significant international partnerships. CDC subsequently explained that the two businesses had gradually diverged in their strategic direction.
The development is therefore more accurately characterised as a change in joint development arrangements, rather than evidence of problems across all of Firmus’s customer contracts. Nevertheless, for a company whose valuation depends heavily on large-scale expansion, changes to a significant partnership can prompt investors to reassess construction plans, financing requirements and delivery expectations.
7–8 October: Subscription Pressure Mounts as Pricing Discussions Continue
As these developments received further attention, investors began reassessing the risks associated with participating in the offering. According to Reuters, some investors began withdrawing their indications of interest on 7 October. Lock-up arrangements for existing shareholders also attracted scrutiny. Certain shares could potentially become eligible for sale on the first day of trading, raising concerns about the initial supply of shares and their potential impact on market pricing.
As the bookbuild progressed, media reports indicated that the underwriting syndicate was considering a lower offer price and adjustments to the capital raising size. By 8 October, questions remained regarding the scale of debt, energy requirements, project delivery and the level of disclosure provided to investors. There was considerable uncertainty over whether the offering could proceed on its original terms.
From an investment perspective, a lower offer price may improve valuation attractiveness, but it does not automatically resolve all underlying risks. For capital-intensive AI infrastructure businesses, investors must still understand whether sufficient construction funding is available, whether financing costs are sustainable, when projects are expected to generate revenue, and how delays or cost overruns could affect returns.
In our view, the bookbuild reflected more than investors’ confidence in AI as a sector. It also tested their willingness to accept the specific pricing and risks associated with financing future growth.
9 October: Firmus Withdraws Its IPO
Firmus ultimately announced the withdrawal of its ASX listing application.
The company stated that, having considered recent market volatility and prevailing market conditions, its board believed the terms under which the offering could proceed did not adequately reflect the strength of the business and its long-term growth prospects. Firmus therefore decided to pursue private capital and other financing alternatives. The withdrawal demonstrated that a gap remained between the issuer’s valuation expectations and the price and risks investors were prepared to accept.
AI infrastructure may continue to offer significant growth opportunities. However, the sector’s investment potential must be supported by reasonable valuations, verifiable project progress and transparent financing arrangements before it can translate into an attractive investment proposition.
Monitoring Market Developments: Candour Decided to Withdraw Before Firmus Cancelled Its IPO
From the opening of the bookbuild, Candour closely monitored market developments, investor feedback and the progress of the offering. Risk assessment remained an integral part of the participation process.
As further information emerged regarding valuation concerns, changes to the CDC partnership and potential adjustments to the offering terms, we assessed the implications for project expansion, financing requirements and potential investment returns. We also closely followed subsequent formal communications from the issuer and the underwriting syndicate.
Our key considerations were whether the proposed valuation reasonably reflected growth that had yet to be realised, what changes to commercial partnerships meant for project execution, and whether future funding requirements and associated risks had been adequately disclosed. As uncertainty increased, the information available at the time was no longer sufficient to support continued participation. Following this ongoing assessment, Candour’s head office decided on the afternoon of 8 October not to proceed with the IPO. Based on the information then available, we concluded that continued participation no longer met Candour’s requirements for investment assessment and risk management. Accordingly, we cancelled all client subscription orders submitted through Candour and received confirmation of their withdrawal.
Our advisers subsequently contacted clients individually to explain the risk considerations and associated arrangements. Clients expressed their understanding and support for the decision.
On 9 October, we received formal notification that Firmus had discontinued the IPO.
We place significant importance on providing clients with access to a broader range of market opportunities and investment transactions. As a professional advisory team, we place equal emphasis on balancing potential returns against associated risks. When material terms change and risks become difficult to assess adequately, risk management must take priority. Continuously monitoring information, adjusting investment assessments in a timely manner and clearly communicating the reasons behind our decisions are fundamental aspects of our service.
The decision to withdraw client orders was a risk management measure based on the information and uncertainties prevailing at the time. It should not be interpreted as a definitive judgement on Firmus’s future operating performance. Firmus’s IPO plans may have been put on hold, but Candour’s commitment to protecting investors’ interests remains unchanged.
As market information, investment products and industry developments continue to evolve, we will maintain a disciplined approach to assessing opportunities and risks. Our priority remains to broaden clients’ access to investment opportunities while keeping risk management and investor interests at the centre of our decision-making, with the objective of safeguarding clients’ long-term interests.
Disclaimer
This material is intended solely for wholesale clients as defined under section 761G of the Corporations Act 2001 (Cth) and is not intended for retail investors. The information contained in this material is general in nature and does not take into account the investment objectives, financial circumstances or particular needs of any individual. Certain company financial information, valuations and IPO-related information referred to in this material have been sourced from publicly available third-party reports and may be subject to change. Target returns, potential IPO valuations and anticipated investment horizons are not guaranteed. Pre-IPO investments and investments in unlisted equity involve significant risks and relatively low liquidity. An IPO may be delayed, postponed indefinitely or may not proceed at all, and investors may lose some or all of their invested capital. Before making any investment decision, investors should read the formal investment documents and seek independent legal, taxation, financial and accounting advice appropriate to their circumstances.