Firmus IPO fails as 'risk-reward trade-off didn't stack up': Morningstar strategist | The Business

AI data centre company Firmus scrapped its plan to list on the ASX and raise $7.1billion in one of Australia's biggest share market floats. The company cited recent market volatility and conditions, saying the offer would not appropriately reflect its long-term growth prospects.

Morningstar's senior market strategist, Lochlan Halloway says the $11 dollar a share price tag was probably too high. "It just goes back to how risky and uncertain all of this is, and the price that Firmus was planned to IPO at did not stack up on the risk-reward trade-off."

He says given he was never able to access the prospectus, its unclear to him whether this is a loss for the ASX and investors or not. "More business on the ASX is good for public markets in general, because it gives retail investors the opportunity to invest in these things that would otherwise be only in the hands of private markets and super funds....So we have lost that. But on the other side, if the price was too high, then investors perhaps have been spared investing in an investment that wasn't all that appealing." He told Alicia Barry on The Business.

Firmus said it would now pursue private market funding while considering other options.

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