NEW YORK, July 12, 2026, 11:09 EDT
Fermi Inc. NASDAQ:FRMI shares closed Friday at $6.59, down 10.0%, after the data-center power developer priced an upsized $375 million convertible bond. The stock lost 18.2% over the five sessions through Friday while the S&P 500 gained 1.2%, a gap that points to company-specific financing concerns rather than a broad retreat from artificial-intelligence infrastructure.
The timing matters. A July 9 filing said Fermi had $92.0 million in cash and cash equivalents on June 30, including $29.2 million restricted for specified uses, implying $62.8 million was unrestricted. That was about 70% below its $207.5 million unrestricted balance at March 31; the filing also put equipment borrowings at $536.9 million.
The five-year notes carry a 5% coupon, or annual interest rate, and initially convert at about $9.52 a share. A convertible note is debt that can be exchanged for stock under set conditions. Fermi also allocated $30 million to a “capped call,” a hedge designed to offset potential dilution up to $14.64 a share, but not above that level. TradingView
| Base offering: investor math | Amount |
|---|---|
| Note principal | $375.0 million |
| Estimated proceeds after fees | $362.25 million |
| Capped-call hedge cost | $30.0 million |
| New cash after fees and hedge | $332.25 million |
| Annual cash interest | $18.75 million |
| Share equivalent at initial conversion | 39.4 million |
| Share equivalent versus March 31 count | 6.3% |
| Illustrative liquidity using June 30 cash | $395.1 million |
| Illustrative gross debt after base sale | $911.9 million |
Before spending after June 30. Figures are calculated from company disclosures and rounded.
At the initial conversion rate, the notes are equivalent to 39.4 million shares against 629.8 million shares outstanding at March 31. Fermi may settle conversions in cash, stock or a combination, so the share count is not automatic dilution. The $9.52 conversion price was about 44% above Friday’s close; interest and leverage are the nearer-term costs.
After fees and the hedge, the offering should add about $332.3 million of cash. Combined with the implied June 30 unrestricted balance, that would provide roughly $395.1 million before any subsequent spending — less than the $441 million Fermi invested in project property and equipment during the first quarter. The comparison is not a burn-rate forecast: the company has said future capital deployment will be tied more closely to commercial progress.
The relative move was stark. Applied Digital NASDAQ:APLD, another listed data-center infrastructure developer, lost 5.8% between July 2 and July 10, while power-and-computing operator TeraWulf NASDAQ:WULF gained 3.7%. Fermi underperformed both.
| Security | July 2-July 10 | Friday |
|---|---|---|
| Fermi NASDAQ:FRMI | -18.2% | -10.0% |
| Applied Digital NASDAQ:APLD | -5.8% | -3.5% |
| TeraWulf NASDAQ:WULF | +3.7% | -5.3% |
| S&P 500 | +1.2% | +0.4% |
The offering memorandum added commercial context. Fermi said it had held preliminary discussions with seven potential tenants and 12 potential joint-venture partners, which could share project ownership and funding, with more advanced talks under way with a smaller group. It also said discussions with a potential chief executive were advanced, while warning that a tenant or partner transaction could require the issue of a material amount of new equity.
With U.S. cash markets closed Sunday, the next firm date is Tuesday, July 14, when the bond sale is scheduled to close. Buyers have an option to add another $56.25 million within 13 days of issuance. Full exercise would lift the notes to $431.25 million and the initial share equivalent to about 45.3 million shares, or 7.2% of the March share count.
But the hedge does not erase the debt, and its protection ends at $14.64. Fermi had not generated operating revenue through March 31, while its ground lease requires a definitive lease with a Phase 1 tenant for at least 200 megawatts before it can receive a notice to proceed with vertical data-center construction. A delayed tenant signing or another heavy spending quarter could force more financing and potential dilution; a binding lease or funded partner could ease that pressure.
Friday’s turnover of 72.5 million shares was about four times Fermi’s recent daily average of 18.1 million, meaning the repricing was not driven by thin trading. The next test is whether the added financing runway produces a signed customer before construction spending tightens liquidity again.
