Key insights
- Fermi's board resisted a takeover attempt by its former CEO, who allegedly crashed the stock. The company is building a 17 GW hybrid power grid in West Texas. While not an immediate value play, the situation highlights board fiduciary duty and the importance of power infrastructure for future compute, potentially offering a future investment opportunity.
Yesterday FRMI's board took action to resist the take-under of the company by it's former CEO after having crashed the issue, and taken YA Global "restructuring" money.
This is a company building a 17 GW private hybrid nuclear, nat. gas, solar power grid in West Texas and has permits and cash, some gas generation turbines secured / shipping, and relationships, but no off-take agreements for future production by hyperscalers this project is specifically built to service.
Both CEO and CFO have been removed from operational control, though their consortium allege to control up to 40% of shares.
The story lends itself to a Klarman valuation style given the asset heavy mix, and new construction optimizes against depreciation for valuing replacement-cost moats. It is also inline with solving the secular problem of power as a constraint to the future of compute.
To be clear: I am not sure that this is a value today, but it is symbolic of a board demonstrating Fiduciary Duty to the shareholders, and the story will be informative of the state of the markets and personalities involved.
Knowing about it early could prepare you to strike when the time is right.