Firmus Technologies was seeking to raise $7 billion in an IPO that valued the data centre operator at a whopping $44 billion, which would have put it ahead of Coles, QBE and all but around 15 companies on the local bourse.
But The Australian and The Australian Financial Review were both reporting on Thursday that bankers were struggling to find buyers for the float at its hoped-for price of $11 per share.
They were attempting to salvage the listing by slashing the price to around $8.25 per share, both publications reported, quoting anonymous sources.
"Obviously, it's still a lot of rumours and innuendo, but where there's smoke, there's fire, and I think at this stage they're going to have a lot of trouble getting this float away," WeBull Australia chief executive Rob Talevski told AAP.
"Clearly, demand's not there."
Shares in Maas Group, a Dubbo, NSW-based diversified industrial group that owns a 3.2 per cent stake in Firmus and is also a supplier to the company, plunged by over 20 per cent to a more than two-month low of $4.96 on Thursday.
In response to a query from the ASX, Maas Group attributed the slide to market speculation and commentary about whether Firmus' IPO would be proceeding.
Critics questioned Firmus' valuation because the company is still in start-up phase and only a fraction of its AI data centres have actually been constructed.
It has just two currently operational, in Melbourne and Singapore, with plans to build many more, including two in Tasmania that have run into community opposition.
Firmus plans to issue around $US30 billion in debt to pay build the data centres, then rent the "AI factories" back to big tech companies such as Meta.
The company was founded as a Bitcoin mining company in 2019 by Oliver Curtis, his cousin Tim Rosenfield and brother-in-law Jonathan Levee.
The husband of Sydney socialite Roxy Jacenko, Mr Curtis was convicted a decade ago in a high-profile insider trading case and served 12 months in prison out of his two-year sentence.
Mr Curtis holds a 13.3 per cent stake in Firmus, with its other investors including AI chipmaker Nvidia, global private equity giant Blackstone and local backers Regal Partners and Wilson Asset Management.
Ron Shamgar, the head of Australian equities at TAMIM Asset Management, agreed that the IPO was likely dead.
"A repriced IPO is a dud IPO!" he posted on social media. "That's the #1 rule."
Mr Talevski said that if the float was pulled, it would be a "disaster in a sense," but the market had a short memory and Firmus could always float later at a lower valuation.
"But I think there's a lot to weigh up here," he added, noting that a growing community backlash against data centres suggested that building them might not be as easy as first thought.
