Co-Founder and Largest Shareholder Launches Public Attack on Fermi's Board, Citing Rejection by Shareholders and Voters

What happened

Fermi's co-founder and largest shareholder Toby Neugebauer issued a scathing public statement accusing the board, led by Rick Perry, of ignoring shareholder and voter sentiment and acting with a 'we can do whatever we want' attitude. The release claims that shareholders, markets, and Texas voters have rejected the current board, signaling a potential proxy fight or governance overhaul. This public dissent follows prior governance red flags, including the company's admission that it had not filed all required periodic reports. The boardroom conflict introduces further uncertainty around Fermi's ability to secure an approved customer agreement before the December 31, 2026 covenant deadline. Such turmoil could distract management, alienate counterparties, and increase the probability of distressed financing or equity dilution.

Implication

The shareholder attack materially increases the bear case: a proxy contest or board shake-up would divert management attention from critical milestones like tenant contracting and turbine deliveries. Lenders and potential customers may hesitate to commit amid public infighting, making it harder to satisfy the 'Approved Customer Agreement' condition by year-end 2026. The stock is likely to remain volatile as the dispute unfolds, and the existing $20M liquidity covenant becomes more precarious if financing draws are delayed. Even if new leadership eventually emerges with a better strategy, the transition period likely consumes valuable time against the December 31, 2026 mandatory prepayment trigger. Investors should demand a wider margin of safety, such as a price below $5.50, before considering any long position.

Thesis delta

The thesis shifts further bearish due to increased governance risk. The public dispute with the co-founder and largest shareholder raises the probability of management distraction, reduced counterparty confidence, and failure to secure a lender-qualifying customer agreement by the December 31, 2026 deadline. This reinforces the existing POTENTIAL SELL rating and suggests the bear scenario probability should be raised above the prior 30%.