Neugebauer Defends $375M Convertible After Board Resignation, But Tenant Contract Still Missing

What happened

Co-founder Toby Neugebauer issued a statement defending the $375 million convertible note offering that prompted former CFO Miles Everson's resignation from Fermi's board, while reaffirming confidence in securing a tenant for Project Matador. The news highlights ongoing governance friction, with Neugebauer accusing the board of abusing Texas corporate law. However, the core investment thesis remains unchanged: Fermi still lacks a filed, lender-qualifying 'Approved Customer Agreement' that would de-risk its capital structure. The $375 million convertible adds debt but does not resolve the Dec 31, 2026 mandatory prepayment trigger or the $20 million minimum liquidity covenant. Everson's departure is a signal of internal dysfunction, but the critical catalyst—a binding tenant contract—remains absent from filings.

Implication

The news reinforces the need for tangible progress on tenant contracting. Until Fermi files a binding tenant agreement that satisfies lender definitions, the equity remains a binary bet on a single catalyst. The convertible note provides near-term cash but adds leverage and governance noise. Investors should require proof of a credit-underwritten tenant contract and turbine delivery milestones before considering a position.

Thesis delta

No material change to the bearish thesis. The convertible note offering and board resignation add governance and capital structure concerns, but the central underwriting question—whether Fermi will secure an 'Approved Customer Agreement' by the Dec 31, 2026 deadline—remains unresolved. The thesis delta is zero: the stock still prices a tenant contract that does not exist in filings.