Fermi (NASDAQ:FRMI) co-founder and largest shareholder Toby Neugebauer said he is calling for a special shareholder meeting to elect a new board majority, arguing that the company should evaluate strategic alternatives alongside its current tenant strategy for Project Matador.
On a shareholder update call, Neugebauer said he remains proud of what Fermi America has built over the past 15 months but believes the company is entering a new phase of risk as it moves from initial groundwork and infrastructure toward construction of power generation and data centers.
“We cannot be more proud of what we built at Project Matador,” Neugebauer said. “It is a uniquely rare asset.” However, he said shareholders should have a stronger voice in deciding the company’s next steps.
Neugebauer Calls for Dual-Track Review
Neugebauer said his proposed remedy is an “independent dual-track process” that would evaluate market outcomes before value or opportunity is lost. Under his framework, a new board would pursue potential M&A alternatives while management would continue working on tenant agreements.
He said he is not seeking to return as CEO and does not have a predetermined outcome in mind. “I want the best risk-adjusted outcome for the shareholders,” Neugebauer said.
Neugebauer said he believes the natural owner of Project Matador would bring what he called the “three Cs”: low cost of capital, construction capability and either customers or access to customers. He described the project as potentially one of the most capital-intensive in the world and said cost of capital has become a central concern.
Risks Cited as Project Moves Into Construction
Neugebauer identified four major risks that he said warrant a review of all options:
- Leasing price risk: He said an initial tenant deal could set an important precedent for the long-term value of the campus.
- Financing risk: He said Fermi’s cost of capital has changed, particularly as capital needs may rise if the company provides additional mechanical, electrical and plumbing, or MEP, infrastructure.
- Dilution risk: Neugebauer said capital intensity and higher financing costs have increased the risk of dilution to existing shareholders.
- Counterparty risk: He cited risks involving customers, contractors and vendors.
Neugebauer said the company was not “looking for customers” when he departed on April 17, but was working to deliver on expanded requests from customer groups. He compared the situation to a restaurant that “set out to sell steak” and was then asked by the market to “add lobster,” referring to additional cooling and MEP requirements discussed during an earnings call.
Project Matador Assets and Potential Buyers
Neugebauer emphasized that Fermi has assembled what he called a difficult-to-replicate platform, citing real estate, a full-time team with power-development expertise, more than 2 gigawatts of secured generation capacity, water access, a Clean Air Permit, financing facilities, and installed gas and water pipelines.
He said “speed to token” is a key factor for customers seeking AI compute capacity and argued that Project Matador offers scale over the next five years. He also said prospective customers have responded to the company’s execution at the site, including through numerous helicopter tours.
Neugebauer said he sees six categories of potential buyers or strategic counterparties: hyperscalers, oil and gas majors, data center developers, infrastructure and private equity or sovereign wealth funds, neocloud companies, and chip or semiconductor companies. He said some of those groups could benefit materially from access to gigawatt-scale power and compute capacity, though he framed those estimates as part of his analysis with bankers.
He also discussed the company’s nuclear business, saying he believes the AP1000 units will be built and noting interest from small modular reactor companies and companies providing services around the nuclear industry. He cited Mesut, described as Fermi’s domestic partner leader, and Dr. Choi in Korea as executives with significant nuclear expertise.
Stock Overhang and Governance Dispute
Neugebauer argued that Fermi’s share price has not reflected the company’s execution, attributing much of the decline to stock overhang and governance-related developments rather than operational performance. He referenced share sales or potential liquidity efforts involving PennCross, Griffin and pre-IPO investors, and said those factors made it harder for the stock to build momentum even after positive company announcements.
He also criticized the current board, saying it had refused to run a strategic process and that he had raised governance concerns beginning in January. He said the board has been “incredibly aggressive” in the 27 days since his departure and criticized what he described as a change in voting thresholds during the dispute.
Neugebauer said the board slate he is proposing includes David Daglio, former CIO of Mellon Investments; Charles Elson, a corporate governance adviser; John, whom he described as having led large projects for BP; Janet, whom he said has significant energy experience; Juan, former vice chairman of PwC Global Advisory and a director at Wells Fargo; and Sheila. He said the goal was to bring in directors who would provide an honest assessment and improve governance.
Timeline Proposed
Neugebauer said engagement with investors and potential strategic parties is already underway and that many hyperscalers have visited the site and reviewed data rooms. He said there are roughly 30 legitimate buyers across the six categories he identified and that a banker shortlist is complete.
If a shareholder meeting were completed by June 30, Neugebauer said he believes the company could know “who the owner is” by Aug. 1, describing the process from the date of the call as roughly 75 days.
Neugebauer closed by saying he believes Project Matador’s “best days are ahead of it” and reiterated that his objective is to allow shareholders to decide the company’s future.
About Fermi (NASDAQ:FRMI)
Fermi's mission is to power the artificial intelligence (“AI”) needs of tomorrow. We are an advanced energy and hyperscaler development company purpose-built for the AI era. Our mission is to deliver up to 11 gigawatts (“GW”) of low-carbon, HyperRedundant™, and on-demand power directly to the world's most compute-intensive businesses with 1.1 GW of power projected to be online by the end of 2026. We have entered into a long-term lease on a site large enough to simultaneously house the next three largest data center campuses by square footage currently in existence.
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