The Australian Financial Review recently surveyed seven top Australian fund managers, including Minotaur Capital co-founder Armina Rosenberg, on Firmus Technologies. The AI neocloud is seeking a $43.7 billion valuation in what is expected to be the second-biggest float in Australian history.
Opinions ranged from bullish comparisons to BHP to outright short calls. As a global equities fund, we shared our view:
We won't be participating, but that isn't because we think Firmus is a bad business.
We see the contracts as real, and CoreWeave in the United States proves out the business model. Our issue is the price. The touted valuation asks investors to pay today for everything going right. That includes all 912 megawatts billing on the company's timetable when only 46MW is operating, the Asian build financed at 80-90 per cent debt, and the fleet recontracting at today's prices for years after the initial terms end.
Nvidia, Blackstone and Coatue paid roughly $15 billion for this company eight weeks ago, and they aren't escrowed. We'd rather stand with the price they paid than the price they're free to sell into.
That isn't a permanent no. We'll read the prospectus, watch how the first sites deliver and revisit from there.
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