Hedge funds eye Firmus $7bn ASX IPO for shorts

Hedge funds and other short sellers are monitoring Australian AI infrastructure firm Firmus as it prepares for a potential $7 billion listing on the ASX. The company plans a bookbuild on Oct. 6 and is led by co-CEOs Oliver Curtis and Tim Rosenfield.

Bankers are sounding out institutional investors to gauge demand and set a price range for the offering. Firmus has attracted strong investor interest and high-profile backing, and the size of the proposed issuance has prompted comparisons with large technology listings.

Short sellers have been accumulating positions in several US-listed companies that operate in areas related to Firmus. Similar activity could occur when Firmus’s shares begin trading, with both long and short positions likely to appear in the market.

Valuation and the pace of AI infrastructure spending are central to investor decisions. If demand for infrastructure slows or takes longer to materialise, some investors could increase short exposure to seek profit from any share-price correction.

A recent large technology listing provides an example of how expected listings can attract short interest. Short positions produced about $15.5 billion in paper gains after that company’s shares fell below the initial offer price within weeks of trading.

Public statements from senior technology figures, including Dario Amodei, Sam Altman and Elon Musk, have prompted debate over coordination and the direction of frontier AI development. Those comments have broadened the range of scenarios analysts are modelling for companies whose valuations assume sustained infrastructure spending.

How the ASX market prices future growth expectations and the risks tied to AI infrastructure demand will influence the balance of buying and selling pressure after the listing. Bankers will continue to seek institutional feedback ahead of the bookbuild to determine the offering size and pricing.