Fermi's Top Shareholder Pushes Again for an Immediate Sale of the Company

what happened

Fermi (FRMI) shares rose more than 1% in overnight trading late Sunday after co-founder and largest shareholder Toby Neugebauer issued a fresh letter last week. He again urged the company to sell itself or enter a strategic partnership, according to Stocktwits.

Neugebauer said more than 61% of shareholders voted against re-electing former U.S. Energy Secretary and Texas Governor Rick Perry to the board, which is led by Marius Haas. He argued that the market and Texas voters have reached the same conclusion about the board. He also recalled that on May 22 he proposed running a sale process alongside a search for a partner, when indicative enterprise values stood at $10 billion to $20 billion.

By his account, the shares have since shed roughly four-fifths of their value and raising capital has become much more expensive. He also claims the board has not confirmed that key conditions, such as financing, have been met, and that the company wrongly reported his termination in an 8-K filing.

why it matters

For investors, the story is a case study in a drawn-out corporate fight over control, bylaw changes and a possible sale, all of which can shape how the stock is valued. Stocktwits reports that retail sentiment turned bearish over the past day, and the shares are down more than 80% so far this year.

market impact

Fermi (FRMI) shares: board conflict and dilution risk weigh, while hopes for a sale support the stock

• ↔Fermi shares (FRMI) mixed — a possible sale supports the stock, while the board fight and share issuance weigh on it

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