TL;DR · 30-second read

The Short Version

Fermi is a young company trying to build a huge private power and computing campus to run artificial intelligence systems. Its founder, Toby Neugebauer, was removed as chief executive in April but still owns about a fifth of the company.

He has now formally asked the board to hire an outside bank to test whether selling the company, or bringing in a big partner, would be worth more than going it alone. Shareholders meet October 30.

The stock has dropped about a fifth since April, a sign investors doubt the giant project will get built on schedule.

Toby Neugebauer, co-founder and largest shareholder of Fermi Inc. (Nasdaq: FRMI), stepped up pressure on the company’s board ahead of its October 30 annual meeting. Neugebauer’s group, the Fermi Founder Parties, holds approximately 22% of shares outstanding. In a statement issued September 11 via PR Newswire, the group said it sent the board a letter on September 9 and a presentation on September 10. On September 10 it also submitted a shareholder proposal under SEC Rule 14a-8. The proposal asks the board to retain an independent, nationally recognized investment bank to evaluate extraordinary transactions, including a full-value sale or a majority recapitalization with a strategic partner, and to report the results to shareholders.

Neugebauer also asked the board to voluntarily put two non-binding questions to shareholders. One would restore pre-IPO voting standards in place of a 70% supermajority adopted since April. The other would raise the company’s 2.5% ownership limit to 9.8%. The statement said Fermi shares hit an intraday low of $5.26 on September 10, down roughly 20% since Neugebauer was removed as CEO on April 17.

Executive Summary

The founder of an AI power-campus developer is using the formal shareholder-proposal process to force a question onto the agenda: is Fermi worth more as a standalone company or in a transaction? Neugebauer is careful to say he has never asked the board to sell. His proposal explicitly leaves the existing standalone plan in place and asks only that alternatives be tested against it by an independent banker. He also stated that his group is not soliciting proxies.

The fight matters beyond one company. Fermi went public in October 2025 pitching Project Matador as a private utility, with its own power, transmission and water on a single scalable campus for AI compute. Neugebauer’s critique rests on specific gaps. The one disclosed tenant lease, 222 megawatts with TensorWave, is under 5% of Fermi’s stated 4.8 gigawatts of near-term power opportunity. As of September 10, he says, supporting guarantees and project financing for that lease had not been confirmed. And the company still has no permanent outside CEO.

For investors in gigawatt-scale energy and data center developments, the episode illustrates how quickly confidence can erode. When projects are mostly still potential, the market reacts to leadership turmoil, unconfirmed financing and governance rules that limit shareholder influence.

A Modest Ask With Pointed Timing

Rule 14a-8 is the SEC mechanism that lets eligible shareholders place a proposal in a company’s proxy materials, the documents shareholders receive before voting. Such proposals are typically advisory. Even if one passes, the board is not legally required to act, though ignoring a strong vote carries reputational cost. The proposal is also narrowly drawn: hire an independent bank, test a sale or majority recapitalization against the standalone plan, and report back. A recapitalization means bringing in new capital that would change who controls the company. It is hard to argue against gathering that information in principle, which is likely the point.

The timing is deliberate. Neugebauer paused an earlier proxy contest, meaning a campaign to win shareholder votes for his own positions or nominees. He now says he expected the board to finalize counterparty agreements his team had negotiated, on the terms agreed, and that execution has stagnated instead. Rather than restart a full contest, he is using lower-cost tools: a proposal, a public letter, and a request that the board voluntarily add advisory questions. That keeps pressure on without the expense and escalation of a formal vote-solicitation campaign, while positioning him to argue later that the board refused reasonable requests.

The board’s side of the story does not appear in Neugebauer’s statement. The company has previously said it completed all five objectives of its 90-day plan, as of August 13. Shareholders will need its response to weigh the founder’s characterization of those milestones.

222 Megawatts Against a 4.8-Gigawatt Story

The core economic tension is scale. A megawatt is a unit of power capacity. A gigawatt is 1,000 megawatts, roughly the output of a large power plant. Fermi’s stated near-term power opportunity is 4.8 gigawatts, and its disclosed TensorWave lease is 222 megawatts, about 4.6% of that figure. For a company valued on the promise of a multi-gigawatt campus, the gap between contracted demand and stated potential is what investors are pricing.

Financing is the second pressure point. Neugebauer says that as of the morning of September 10, Fermi had not confirmed the guaranteed agreement it previously said would support the TensorWave lease. He also says it had not confirmed that project financing was secured. In data center development, a signed lease is only as valuable as the tenant’s credit, or the guarantee standing behind it. That credit support is often what unlocks construction loans. Until those pieces are confirmed, the lease reads as a milestone rather than de-risked revenue.

The stock-price figures in the statement also deserve a careful reading. Shares are down roughly 20% since April 17, 35% since July 2, and 20% since August 13. Taken together, those numbers imply shares traded higher in early July than on the day Neugebauer was removed. They also imply shares were near April levels by mid-August. The decline has not been a straight line from the leadership change, which complicates attributing it to any single board decision.

Governance Rules as a Valuation Lever

Two of Neugebauer’s requests concern who can own and influence Fermi. The first targets voting standards adopted since April. Amending bylaws now requires a 70% supermajority, and electing directors requires a majority of all outstanding shares. He wants to restore the standards discussed before the IPO: a majority of shares outstanding for bylaw changes, and a plurality of votes cast for directors. A plurality vote means the candidates with the most votes win, even without an outright majority. Higher thresholds make shareholder-initiated change harder to achieve, particularly when turnout is incomplete. Boards commonly defend such provisions as protection against a single large holder gaining effective control without paying other shareholders a premium. With a 22% holder in a dispute with the board, that argument is plausible here. Fermi’s own stated rationale is not included in the release.

The second request concerns Fermi’s real estate investment trust (REIT) ownership limit. REITs are tax-advantaged property companies, and they must avoid concentrated ownership under federal tax rules. For that reason their charters typically cap how much any one holder can own. Neugebauer notes that peers such as Digital Realty, Equinix and Prologis use 9.8%, while Fermi’s general limit is 2.5%. A lower cap restricts how large a position any single institution can build. That can thin out the pool of large, long-term buyers, and some investors view that as a drag on valuation. Raising it would widen the potential shareholder base. Whether that would change the stock’s trajectory more than delivering contracts and financing would is an open question.

Leadership Uncertainty and Counterparty Confidence

Neugebauer argues that counterparties considering committing billions to Project Matador want to know who is running the company. After a four-month search, Fermi named board member Lee McIntire as CEO. Neugebauer contends that the choice showed no outside candidate would take the role, and says the company itself described McIntire as a temporary solution. The first point is his inference rather than an established fact; searches end with internal appointments for many reasons. The underlying concern is still reasonable. Large tenants, lenders and equipment suppliers weigh management continuity when signing long-dated commitments.

Neugebauer’s own claims warrant scrutiny too. The contention that Fermi is a one-of-a-kind asset, and significantly undervalued, is an argument, not a demonstrated valuation. He says counterparties had agreed to terms while he led the company, but those terms have not been made public. His request that the board release all written communications with him since the IPO could clarify the record for both sides. His stake also gives him an obvious interest in a higher share price. That interest aligns with other shareholders on value, though not necessarily on control.

Background

Fermi Inc., doing business as Fermi America, went public on Nasdaq under the ticker FRMI on October 1, 2025. It was capitalized around Project Matador, which the company describes as a private utility campus. The campus would supply its own power, transmission and water for AI computing at scale, with the stated aim of avoiding added burden on public infrastructure and local ratepayers. The company is organized with a real estate investment trust ownership structure. It reports a near-term power opportunity of 4.8 gigawatts and a disclosed 222-megawatt lease with TensorWave.

Co-founder Toby Neugebauer was removed as CEO on April 17, 2026. Since then, according to Neugebauer, the board adopted a 70% supermajority to amend bylaws and a majority-of-outstanding-shares standard to elect directors. On July 2 it removed the option of a dual-path strategic process, and on August 13 it announced completion of its 90-day plan. Neugebauer launched and later paused a proxy contest. He has also publicly criticized a $375 million convertible note offering, which he tied to former CFO Miles Everson’s resignation from the board. Board member Lee McIntire has since been named CEO.

Sources

Source: Fermi Founder Parties File Formal Proposal for Independent Strategic Review of Extraordinary Transactions, Press Board on Restoring Texas-Style Governance Ahead of October 30 Annual Meeting, a statement from Toby Neugebauer and affiliated entities on their shareholder proposal and governance requests to Fermi’s board.

Primary sources: Fermi Founder Parties File Formal Proposal for Independent Strategic Review of Extraordinary Transactions, Press Board on Restoring Texas-Style Governance Ahead of October 30 Annual Meeting (PR Newswire, September 11, 2026).