ASIC Probes Marketing Claims Behind Aborted $44 Billion Firmus Float

On Thursday, at a Senate estimates hearing, the head of Australia's corporate regulator was asked about a stock market listing that never happened. Sarah Court, chair of the Australian Securities and Investments Commission, said ASIC is making targeted inquiries into the aborted float of data centre start-up Firmus, a listing that would have valued the company at almost $44 billion. She stressed that the inquiries are preliminary, that no formal investigation has been launched, and that no adverse inference should be drawn yet.

The inquiries are aimed at the joint lead managers of the offer: Bank of America, JPMorgan Chase & Co., Morgan Stanley and Morgans Financial. Court set out the question in a letter to Liberal senator Dave Sharma, first reported by The Australian. ASIC is aware, she wrote, of questions about whether information given to institutional and wholesale investors during the marketing and bookbuild process was accurate, appropriately qualified and supported by a reasonable basis when it was provided. The inquiries are ongoing, she said, and ASIC will consider what it obtains and whether further consideration is warranted.

Court also drew a line around what the episode does and does not show. ASIC does not regard Firmus withdrawing its IPO as a failure of Australia's capital markets or of the regulatory frameworks covering pre-IPO marketing and institutional bookbuilds. In her words, robust negotiation between issuers and informed institutional investors is an ordinary and important part of price discovery. She added that ASIC has been reviewing its pre-lodgement advertising and publicity relief for offers of securities to retail investors that require a disclosure document. At the hearing she called the matter a very significant event that needs careful examination.

The scale of the planned deal explains the attention. The banks were aiming to raise about US$5.5 billion (A$7.9 billion), which would have been the largest ASX float since Telstra in 1997. The money would have let Firmus borrow many billions more and build data centres across Australia, Singapore, Malaysia and Indonesia. The company forecast those centres would sell services to firms such as Meta and OpenAI, earning billions.

As the process moved along, some potential investors grew more cautious. They worried that existing shareholders might flood the market with stock soon after the debut, and that overhang added to doubts about what some investors saw as an aggressive pricing strategy. Firmus's financials sharpened the concern: its most recent annual revenue was just $50 million, and it currently operates only two data centres.

Sharma called it reassuring that ASIC is looking into what he described as serious allegations. But he argued the matter reaches beyond one failed float. Credible claims of misleading representation and serious conflicts of interest, he said, go to the heart of market trust, and action must not only be taken but be seen to be taken, or confidence in the financial system and capital markets is at risk.

The company's founders add a further dimension. Firmus was co-founded by Oliver Curtis, husband of public relations consultant and influencer Roxy Jacenko. Curtis served a year in jail in 2016-17 for insider trading, and in 2019 co-founded Firmus as a bitcoin mining company. Curtis, co-founders Tim Rosenfield and Jonathan Levee, and Curtis's father Nick Curtis would have held shares worth more than $10 billion had the listing gone ahead at the planned price.

What to watch now is whether ASIC's preliminary inquiries, currently confined to the lead managers, harden into a formal investigation, and whether its review of pre-lodgement publicity rules changes anything for future floats.