Fermi Inc.'s Shares Plummet by 33% Following Tenant Contract Termination

Dramatic Fall in Fermi Inc. Shares: A Deep Dive

On December 12, 2025, Fermi Inc. (NASDAQ: FRMI) faced a severe setback when its shares plummeted by approximately 33%. This drastic decline followed the company's announcement that a critical agreement with a prospective tenant had been terminated. The tenant was meant to provide significant funding for the ambitious Project Matador, an initiative aimed at developing an advanced energy and intelligence campus at Texas Tech University.

What Happened?

The first tenant had committed to investing $150 million to help push the construction of Project Matador forward. This development has been touted as a groundbreaking venture that would support the burgeoning needs of AI infrastructure. The campus is envisioned as a multi-gigawatt energy and data center, a pioneering move to power the AI revolution.

The company's announcement comes after an impressive fundraising effort in early October, where Fermi raised nearly $784 million through the issuance of over 37 million shares at a price of $21 each. Despite this apparent financial strength, the abrupt cancellation of the tenant agreement led to a swift and harsh market reaction, with shares closing at $10.09, almost 52% below the company's IPO price just two months prior.

Investigative Response

In response to the shocking news, Hagens Berman, a national law firm specializing in shareholder rights, has initiated an investigation. They are focusing on whether Fermi Inc. may have misrepresented the stability and strength of the tenant agreement prior to its cancellation. The firm encourages affected investors to come forward and report their losses.

Reed Kathrein, a partner at Hagens Berman, remarked, "We're focusing on whether the company has been sufficiently transparent about the strength and terms of the agreements with Tenant 1." This highlights the growing concern among investors regarding the company's communication and transparency practices.

Recent Developments

Fermi's previous assurances had offered investors a sense of security. As recently as mid-November, the company had emphasized the credibility of the first tenant, calling it a "very creditworthy counterparty." Executives stated that the agreement established a framework for cost reimbursement and prepayment, which was supposed to ensure substantial funding for infrastructure development ahead of the tenant's occupancy.

However, the narrative took a sharp turn on December 12 when the company revealed that the tenant had opted to terminate the agreement. The reasons behind this abrupt decision remain unclear, leaving investors in a lurch as they ponder the future of Project Matador and Fermi's overall viability as a company.

Conclusion

The fallout from the cancellation of this significant agreement is a stark reminder of the volatility inherent in investments tied to ambitious technological ventures. As Fermi navigates this troubled time, both current and potential investors will be watching closely for more clarity on the situation. The outcome of the ongoing investigation by Hagens Berman will play a crucial role in determining the company's next steps and its standing in the market. With such significant shares in play, the ripple effect of this story is sure to unfold in the coming weeks, as stakeholders on all sides seek answers and solutions to an uncertain future.