Fermi Stock News: Founder Files to Sell as AMD Deal Lands

On the same Tuesday that Fermi Inc. announced AMD would stand behind its first data center tenant, a trust tied to co-founder Toby Neugebauer filed notice to sell 2.75 million Fermi shares. A fact sheet Fermi filed on Wednesday, Oct. 14, adds a second detail the rally skipped past: AMD's backing does not begin until the campus is built and the last phase is paying rent.

What AMD Signed On to Back

Fermi said in its Oct. 13 announcement that it signed a credit support agreement with AMD covering phase one of Project Matador in Carson County, Texas, with 222 megawatts of gross power capacity. The companies also signed a 650-megawatt expansion framework. Fermi called the agreement "a key milestone toward securing project financing."

CEO Lee McIntire said, "Our strategic partnership establishes a framework for phases two and three." None of that later capacity is leased today, Blockspace reported. FRMI closed Tuesday at $3.72, up 14.5% from Monday's $3.25 close, after touching $4.065 intraday, according to Yahoo Finance data.

The tenant, TensorWave, runs an AI cloud only on AMD Instinct GPUs, and AMD is an investor. The lease still has to close. In a Sept. 22 release, Fermi and TensorWave moved the closing date from Sept. 30 to Oct. 31, 2026, to finish a guaranty with an investment-grade counterparty.

The Backstop Starts After Construction

The TensorWave fact sheet, which Fermi posted on its investor events page and furnished with an 8-K accepted at 5:30 PM IST on Oct. 14 (8:00 AM ET), puts the lease at $6.5 billion of contracted revenue over a 15-year initial term, with 2.5% annual escalators and two five-year renewal options. Phase one carries 156 megawatts of critical IT capacity. Delivery starts in the fourth quarter of 2027 and is scheduled to finish in early 2028.

The fact sheet's disclaimer states that the AMD arrangement is subject to customary conditions, "including that AMD's obligations begin only after construction is complete and rent commences on the final delivery phase." It also says the credit support "ends early if TensorWave or its guarantor holds an investment-grade rating for 12 consecutive months."

Read together, those terms mean AMD's credit support helps the financing but does not start during construction. On the fact sheet's schedule, rent on the final phase would begin in early 2028 at the earliest.

What the Build Could Cost

Fermi gave unit costs instead of a total. It lists power capex of $3 million to $4 million per megawatt of total power capacity and turnkey data center capex of $10 million to $12 million per megawatt of critical IT capacity. By TradeFlock's calculation, that implies about $666 million to $888 million for power and $1.56 billion to $1.87 billion for the data center, or roughly $2.2 billion to $2.8 billion for phase one.

Against that, $6.5 billion over 15 years averages about $433 million a year, by TradeFlock's calculation, with escalators tilting payments toward later years. Fermi estimates a phase one project-level NOI margin of approximately 75% to 80%, a non-GAAP figure that excludes interest, depreciation and capital spending.

Fermi's 10-Q for the quarter ended June 30 says the company "had cash on hand of $62.5 million and restricted cash of $29.2 million, a portion of which is available to fund defined capital expenditures." By TradeFlock's estimate, the phase one build is about 36 to 44 times the unrestricted cash, or about 24 to 30 times the $91.7 million combined total.

The Founder Trust's Sale Notice

A Form 144 dated Oct. 13 and accepted at 7:08 AM IST on Oct. 14 (9:38 PM ET on Oct. 13) lists a proposed sale of 2,750,000 common shares, with an aggregate market value of $10,230,000, through Goldman Sachs & Co. LLC. It names Toby Neugebauer, a 10% stockholder, and states, "All shares to be sold by the Melissa A. Neugebauer 2020 Trust." The approximate sale date given is Oct. 13, 2026.

By TradeFlock's calculation, the listed value works out to about $3.72 a share, matching Tuesday's close, and the block equals about 0.43% of the 641,259,703 shares outstanding shown on the form. It reports no sales in the prior three months.

The timing matters because Neugebauer is in an open dispute with the board. In a Sept. 11 exempt solicitation filed with the SEC, the "Fermi Founder Parties," including the same trust, pressed for an independent strategic review ahead of the Oct. 30 annual meeting and said the board removed Neugebauer as CEO on April 17.

A Form 144 is a notice of intent, not proof of a completed trade. As a 10% holder, Neugebauer would normally report any executed sale on a Form 4, which would show the actual price and amount.

What to Watch Before Oct. 31

Three dates now sit within two weeks of each other: the Oct. 30 annual meeting, the Oct. 31 lease closing deadline and any Form 4 from the founder trust. Whether lenders fund a roughly $2.2 billion to $2.8 billion build, by TradeFlock's estimate, before AMD's obligations start is the question the stock has not settled.

Related: TradeFlock on Microsoft's AI capex as a power purchase story, Broadcom's custom AI chip backlog and the Microsoft Maia 300 rack math.

Cover photo: Thomas C. Ferguson natural gas power plant, Texas. Photo: Larry D. Moore / Wikimedia Commons, CC BY 4.0.