Firmus investor Maas Group shares plunge 30% on reports of possible A$5b IPO cut

Shares of Maas Group, which owns 3.2 per cent of Nvidia-backed AI data centre operator Firmus, fell as much as 30 per cent on Thursday following reports that Firmus may reduce the size of its A$5 billion Australian IPO. The company lost about A$517 million in market value, prompting a query from the

Investor concerns that Nvidia-backed Firmus may cut the size of its A$5 billion Australian initial public offering drove a 30 per cent plunge in shares of construction services provider Maas Group, which owns 3.2 per cent in the AI data centre operator. Shares of Maas closed down 22.4 per cent on Thursday, after falling as much as 30 per cent in intraday trading, its weakest level since May 6. The company lost about A$517 million (US$359.52 million) in market value and is now valued at A$1.79 billion.

The final details of Firmus' share sale, the second-largest ever in Australia, were still being finalised on Thursday, according to a person familiar with the matter. Firmus and its advisors on Thursday were contemplating cutting the size of the IPO and reducing the price per share from A$11 each to A$8.25, according to local media reports. Bookbuilding closed earlier Thursday and potential investors were told in a term sheet reviewed by Reuters "the joint active bookrunners will provide further information in relation to the offer."

Demand for Firmus stock from overseas investors was weaker than expected for the IPO, the reports said, which was to be a landmark transaction for Australia's subdued capital markets. Some potential investors told Reuters they were cautious about the company's burgeoning valuation, ability to execute on its ambitious growth plans and hefty debt pile. The deal's initial term sheet had said indicative offers for the IPO were already above the deal's size.

Firmus did not respond to a request for comment from Reuters. Sentiment towards AI has shifted sharply in recent weeks as concerns over high valuations have broadened to worries the technology is slipping out of human control and the prospect that massive technology spending may never pay off.

Maas was questioned by the Australian Securities Exchange over the share price plunge. The company said in an exchange filing that speculation over whether the IPO would proceed had weighed on sentiment, adding it was not aware of any undisclosed information that would explain the trading. "The selloff reflects a legitimate derating of the embedded value of its Firmus stake, but the magnitude is overdone," said Emanuel Ajay Datt, managing director of fund manager Datt Group. A cut in Firmus' offer price to A$9 from A$11 would reduce the value of Maas' holding by about A$75 million, Datt said, adding that the loss was modest relative to the company's market value decline on the day.

Firmus' A$5 billion IPO was to be Australia's largest new share sale in nearly three decades, behind only top telco Telstra's roughly A$10 billion float in 1997.