Caddis Capital Backs Fermi, But Contract Gap Remains

What happened

Caddis Capital, Fermi's second-largest shareholder with a 9.3% stake, publicly reaffirmed its full support for the board, management, and long-term strategic plan, providing a temporary narrative boost. However, the DeepValue analysis maintains a POTENTIAL SELL rating, emphasizing that the stock lacks margin of safety due to the absence of executed anchor-tenant contracts meeting lender definitions. The critical near-term risk remains the lender-defined 'Approved Customer Agreement' deadline of December 31, 2026, and a $20M minimum liquidity covenant that could trigger dilutive financing if unmet. Without filing-level proof of such a contract and evidence that equipment financings are draw-capable, the positive endorsement from Caddis does not resolve the fundamental binary execution risk. The stock trades at $7.87 with a market cap of ~$4.8B, pricing in progress that is not yet substantiated in SEC filings.

Implication

For investors, the Caddis endorsement may provide a temporary floor, but the core thesis hinges on filing tangible proof of an 'Approved Customer Agreement' and turbine delivery milestones within the next 3-6 months. Without these, the stock remains a POTENTIAL SELL with downside to base-case value of $7.75 or bear-case $4.50. Look for progress on the 1H26 turbine delivery window and any SEC filing that includes a lender-qualifying contract; absence of such by mid-2026 likely triggers covenant pressure and equity dilution.

Thesis delta

The Caddis backing reinforces the bullish narrative but does not alter the fundamental investment thesis: Fermi's equity value depends on converting tenant discussions into binding, credit-underwritten contracts that satisfy lender definitions. The news provides a vote of confidence from a large insider, but it does not provide the filing-level evidence required to de-risk the capital structure. The risk-reward remains skewed to the downside until an 'Approved Customer Agreement' is disclosed.