Fermi (FRMI) Stock Craters 20% After CEO and CFO Both Walk Out the Door

TLDR

• Fermi (FRMI) stock dropped 20% to $5.27 in premarket trading Monday after a leadership shake-up
• CEO Toby Neugebauer stepped down; CFO Miles Everson also resigned
• The board had been considering a CEO change for at least three months
• Fermi launched “Fermi 2.0,” a restructuring of its governance and strategic direction
• Evercore maintained its Outperform rating and $20 price target on FRMI

Fermi (FRMI) fell 20% Monday after the data-center developer announced the departure of both its CEO and CFO, triggering a broad leadership restructuring the company is calling “Fermi 2.0.”

Fermi Inc. Common Stock, FRMI

CEO Toby Neugebauer, who co-founded the company alongside former Texas Governor and U.S. Energy Secretary Rick Perry, stepped down effective immediately. He will remain on the board as a director.

The board had reportedly been weighing a CEO change for at least three months. Multiple sell-side analysts confirmed this after joining a call with Fermi management following the announcement.

CFO Miles Everson also resigned from his executive role. He was simultaneously elected to the board after a Neugebauer family trust exercised board nomination rights.

The board is now actively searching for a new CEO. Executive search firm Heidrick & Struggles has been engaged, with a committee of independent directors leading the process.

Fermi has also set up an Office of the CEO to keep operations running during the transition. Jacobo Ortiz Blanes, formerly COO, and Anna Bofa, formerly a Board Advisor, have been named Co-Presidents and will report to newly appointed Chairman Marius Haas.

Haas, previously Lead Independent Board Director, was named Executive Chairman effective immediately.

Jeffrey S. Stein, co-founder of Breakpoint Advisory Partners, was elected to the board, expanding its size from five to seven directors.

Leadership Shake-Up Tied to Tenant Challenges

The leadership change comes as Fermi has struggled to find a cornerstone tenant for its Project Matador campus in Amarillo, Texas. The 7,570-acre site is intended to become the largest data center in the world.

The company said the transition would not affect its ability to deliver power or sign tenants. In fact, management indicated that potential lease discussions had accelerated, with tenants re-engaging within the last 48 hours of the announcement.

Evercore analyst Nicholas Amicucci wrote that the shift represents a change in “tone at the top” while preserving the same operational drive. Evercore reiterated an Outperform rating and a $20 price target.

FRMI had already lost 18% year-to-date heading into Monday’s session before the premarket drop pushed it to $5.27.

New HQ and Expanded Presence Planned

As part of Fermi 2.0, the company announced plans to establish a new corporate headquarters in Dallas. It also intends to build out a corporate office presence at the Project Matador site in Amarillo.

Fermi said the moves reflect its transition from a start-up to a scaled enterprise.

Texas Tech University System Chancellor Brandon Creighton confirmed the university remains committed to its partnership with Fermi America. Discussions are ongoing to extend certain milestones in the lease agreement as Project Matador moves forward.

The company said it expects to announce an Interim CFO this week.

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